Markets Lost $17bn on Chinese Adjustment
Triggered by authorities, the slump on the stock market of China put to flight investors at large. The stock funds outflow has reached $17.2 billion with the emerging markets accounting for nearly a half of the amount, according to Emerging Portfolio Fund Research (EPRF). But even though the outflow broke all records in acceleration, the losses of Russia will be hardly material. Stock markets of Latin America and Asia are the key sufferers.
Investors withdrew $17.2 billion from the stock funds over the first week following the March 2 adjustment on stock market of China, calculated the analysts of Emerging Portfolio Fund Research. Of this amount, $8.9 billion was pulled out of the funds of developed states, while the emerging economies lost $8.3 billion.
On March 2, the stock indices of China shed 9 percent and the market capitalization narrowed by $140 billion. It was the biggest slump in the country registered in the past decade. The markets of many nations responded by the decline, which generally ranged from 2 percent to 4 percent. The benchmark of Russia’s Trading System (RTS) sank more than 9 percent in a few days. Though investors withdrew relatively equal amount from developed states and emerging nations, the losses of the latter are much bigger in percentage terms.
The countries of Latin America (4.11 percent of assets in management) and Asia (3.46 percent; less Japan), are leading in outflow, which hit 72 percent of the assets in Latin America and 67 percent in Asia. Stock funds of Chinese companies lost $1.97 billion, while the aggregate losses of Asia (without Japan) reached $4.1 billion.
As to the market behavior in Russia, it is very volatile. Anyway, the amount of capital outflow could be adequately calculated no sooner than by the month results.
www.kommersant.com
All the Article in Russian as of Mar. 12, 2007
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