FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.
FINANCIAL CHRONICLE™

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka

LISTED COMPANIES

Submit Post



Poll

Can there be another Covid-19 wave in Sri Lanka?

China slowdown weighs on emerging market funds Vote_lcap68%China slowdown weighs on emerging market funds Vote_rcap 68% [ 178 ]
China slowdown weighs on emerging market funds Vote_lcap18%China slowdown weighs on emerging market funds Vote_rcap 18% [ 47 ]
China slowdown weighs on emerging market funds Vote_lcap13%China slowdown weighs on emerging market funds Vote_rcap 13% [ 35 ]

Total Votes : 260

STOCK MARKET TRAINING
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post


CONATCT US


Send your suggestions and comments

* - required fields

Read FINANCIAL CHRONICLE™ Disclaimer



Latest topics

» Shares to Buy
by Rational Investor Today at 3:36 pm

» LOFC AND CLC Target Price??
by abey Today at 11:39 am

» The fate of NIFL .. CLC .. LOFC under LOCH
by abey Today at 11:36 am

» CLC - Bull & Bear LOCKED HORNS - can blast at any time.
by Rational Investor Today at 9:43 am

» කොළඹ කොටස් වලට ඉදිරියේ එන ප්‍රවනතා
by Rational Investor Today at 9:42 am

» LOLC FINANCE PLC (LOFC.N0000)
by Captain Today at 6:48 am

» Any Investment Opportunities With Good Guranteed/Less Risk Returns?
by dydx Today at 2:30 am

» Stock market for beginners. Code of conduct to be followed
by Asoka Samarakone Yesterday at 9:22 pm

» Water For All - CIND
by LHW Yesterday at 8:31 pm

» KOTAGALA PLANTATION PLC (KOTA.N0000)
by CITIZEN Yesterday at 2:59 am

» Any thoughts on upcoming EX pack IPO and LCB Finance IPO?
by N W Mon Oct 18, 2021 11:15 pm

» Exit EXPO Enter EDEN strategy broadened to Exit EXPO Enter LOLC GROUP
by Chathur Mon Oct 18, 2021 8:49 pm

» Bitcoin could trigger financial meltdown, warns Bank of England deputy
by ResearchMan Mon Oct 18, 2021 2:46 pm

» LAST PRESIDENT ELECTION
by Wickyz Mon Oct 18, 2021 1:17 pm

» KELANI TYRES PLC (TYRE.N0000)
by Value Pick Mon Oct 18, 2021 12:48 pm

» EXPO/BILL/LOLC
by Dilshan2020 Mon Oct 18, 2021 12:25 pm

» HEMAS HOLDINGS PLC (HHL.N0000)
by Vishwanarth Mon Oct 18, 2021 10:47 am

» CFLB hidden gem
by Value Pick Mon Oct 18, 2021 10:44 am

» FINANCE AND LEASING SECTOR
by Mohammed020 Mon Oct 18, 2021 6:20 am

» PEOPLE'S INSURANCE PLC (PINS.N0000)
by Ekanayake90 Mon Oct 18, 2021 12:21 am

EXPERT CHRONICLE™

MARKET CHAT


CHRONICLE™ ANALYTICS


ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

LATEST TWEETS

You are not connected. Please login or register

FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » China slowdown weighs on emerging market funds

China slowdown weighs on emerging market funds

Go down  Message [Page 1 of 1]

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics
REUTERS: As China slips, the second-half performance for many emerging market mutual funds might soon follow.

In recent months, investors have been pulling hundreds of millions of dollars out of stock funds that invest mainly in companies associated with the big four emerging market nations of Brazil, Russia, India and China.

But it’s China that is causing most of the worry for fund investors, amid signs that the world’s second-largest economy is slowing more sharply than expected.

Even emerging market bull Jim O’Neill, chairman of Goldman Sachs Asset Management, who famously coined the BRIC acronym, said he’s been a bit surprised by the slowdown in China. But that said, O’Neill remains convinced China’s economy will be more than enough to make-up for any weakness in the other BRIC nations.

“It is making the trajectory that I predicted difficult to stick with,” O’Neill said about the slowdown. But he added, “I find it hilarious that people question the thesis on the basis of two quarters.”

The second-quarter was not kind to so-called BRIC-focused stock funds, with investors redeeming $787 million during the period, according to fund tracking firm EPFR. Chinese-focused funds were hit particularly hard, with investor redemptions totalling 88 percent of the $1.6 billion in new money those funds took in during the first quarter.

The rush of money out of Chinese funds come as institutional investors are dialing back growth estimates. In a recent report, Ray Dalio’s Bridgewater Associates attributed “about half” of the slowdown in global growth “to the slowdown in China.”

One sign of the Chinese slowdown can be seen in China’s purchasing managers index which dropped to 50.2 in June after hitting a year-long high of 53.3 in May.

The growing concern about China and slower growth in the other BRIC nations is also starting to show up in the performance of some U.S. emerging markets funds and hedge funds focused on Asia.

Mutual fund industry tracking firm Morningstar says U.S. emerging market stock funds were up 4.61 percent as of June 30, compared to a 5.51 percent gain for non-emerging market stock funds.

China-focused U.S. mutual funds are up 2.9 percent, lagging behind the 4.15 percent gain recorded by diversified emerging market stock funds, according to Morningstar.

The benchmark S&P 500 index, meanwhile, is up about 7 percent this year.

Some Asia-focused hedge funds that go long and short stocks are posting mediocre numbers. HSBC Private
Bank reports the Chilton China Opportunities Fund was up a little under 1 percent as of June 22, while the Pinpoint China Class A Fund was up about 1.3 percent over the same period.

As a whole, however, emerging market stock funds are performing far better than last year, when the group posted a 20 percent decline. But after a fast 13.1 percent gain in the first quarter of 2012, emerging market funds as a group gave back more than half of those gains in the second-quarter.

Now the worry is that with China’s economy slowing, emerging market funds may see further losses in the second-half of 2012, especially if other BRIC nations experience even slower growth.

Bill Rocco, a Morningstar analyst, said China is showing that it is vulnerable to the financial crisis in Europe and the less than robust economy in the U.S.

“I’m always wary of people trying to pick this market or that market,” he said.

On top of that, some investors are beginning to become more cautious about China’s growth estimates.
Cameron Brandt, director of research for EPFR Global, said investors are showing “growing discomfit with official statistics” from China.

Then again, recent history suggests that emerging market countries will still outperform the rest of the world. From 2009 to 2011, the economies of the BRIC nations grew at rates that were 2 to 3 percentage points higher than most other nations, including Europe and the U.S.

BRIC boosters like O’Neill point out that even if China’s growth slows it will still far outpace the average 2.8 percent growth recorded last year by the G-20 nations. The most recent World Bank estimate is that China’s gross domestic product for 2012 will be 8.2 percent, down from 9.2 percent last year and 10.4 percent in 2010.

Jean-Charles Sambor, director of fixed income at $1.7 billion Everest Capital, a Miami hedge fund that focuses on emerging markets, said what is happening in China and the other BRIC nations is that economic growth is returning to a more sustainable level. He said Chinese export growth for the year is around 12.7 percent after hitting 20 percent in 2010. Some of that is the result of economic woes elsewhere.

“The rebalancing towards less export-driven to domestic consumption … is happening in most BRIC countries and most emerging markets,” said Sambor. “The story remains very strong.”
http://www.ft.lk/2012/07/10/china-slowdown-weighs-on-emerging-market-funds/

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum