According to the latest figures from JPMorgan asset management, the emerging market equities suffered their biggest quarterly outflows since 2009, a time when the world was reeling in Great Recession. With better prospects in the United States under Donald Trump’s Presidency and a faster pace of hikes in 2017, investors shunned emerging markets’ equities and bonds.
According to JPMorgan, investors have pulled out $38.4 billion from the emerging market debt and equities and that is the biggest quarterly outflow in seven years. The China remains the single biggest risk in the emerging market. After Donald Trump got elected in November, the depreciation of the Chinese yuan accelerated against the dollar, forcing the People’s Bank of China (PBoC) to reign on liquidity in order to prevent the yuan from sliding fast. However, that has pushed the borrowing cost of yuan for overnight loans to second highest on record at 61.3 percent last week.
One of the biggest risks in the emerging markets is corporate defaults on their dollar commitments in 2017 as the dollar and the interest rate rises.


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