Emerging Markets 01 (May 08 - Dec 11)

[millionairemind]

According to data from EPFR Global, a Boston-based fund flow data tracker, outflows from money market funds hit a four-month high during the third week of January, with emerging market equity funds, commodities as well as emerging markets and high yield bond funds being among the major beneficiaries of the new wave of liquidity.

Emerging market equity funds took in US$1.2 billion during the week ending Jan. 22.


Source: Dow Jones Newswire

Er.... If the funds took in money, Y is the market going down??

[winston]

Ha Ha ... that was last week. Money already flow out this week

[kennynah]

what about now?

[winston]

Emerging Stock Funds Post First Outflows in 12 Weeks (Update2)

Jan. 29 (Bloomberg) -- Emerging market equity funds posted the first net outflows in 12 weeks on concern that China will take further steps to curb inflation and the global economic recovery will slow, according to EPFR Global.

Funds investing in developing-nation equities lost $608.5 million overall in the week ended Jan. 27, EPFR Managing Director Brad Durham said. Those focused on Asian stocks outside Japan had the only inflows, with China posting its first gain since mid-December, the fund tracking company said. BRIC funds investing in Brazil, Russia, India and China posted outflows for first time since early September.

Investors pulled $716.2 million from global emerging market stock funds, the most in 23 weeks. Latin America’s shares had redemptions of $222 million, the fastest pace in 29 weeks, while $41.5 million was withdrawn from Emerging Europe, Middle East and Africa equities, Durham said. Funds investing in Asian stocks outside of Japan received about $371 million, he said.

Still, China stock funds took in $288 million after losing $348 million the previous week, the most in 18 weeks. Indexes tracking Chinese shares in Hong Kong and Shanghai are the worst performers in Asia this year after last year’s gains of 62 percent and 80 percent, respectively, according to data compiled by Bloomberg.

Outflows from developing-nation stocks contributed to a combined $9 billion pulled from all equity funds for the week, while bond funds received $4.8 billion, extending a winning streak that started in March, EPFR said. The research company tracks funds with $12 trillion of assets globally.

http://www.bloomberg.com/apps/news?pid= ... BSvswW1PjY

[winston]

GETTING TECHNICAL
Falling BRICs Can Shake Other Emerging Markets By MICHAEL KAHN o

THERE HAS BEEN A SHIFT IN the global equity scene that seems to have gone unnoticed. While world attention was focused on places like Dubai and Greece, three of the superstars -- Brazil, India and China -- have made significant technical breakdowns.

And the fourth member of the BRIC quartet -- Russia -- is not far behind. This is not good news for all emerging markets since the BRIC countries are considered to be bellwethers for the broader emerging-market sector.

The most damaged of the group from a technical standpoint is China. The Shanghai Composite Index has made a series of lower highs and lower lows since November to fulfill the most basic definition of a declining trend.

Domestic investors will note even more damage in the iShares Trust FTSE/Xinhua China 25 Index Fund (ticker: FXI). This exchange-traded fund has completed a technical pattern called a rounded top (see Chart 1).

Chart 1
[GT1]

A rounded, or saucer top is a difficult pattern to trade since it does not offer a clear, objective level at which all can agree it breaks down. But as with art and pornography, we know it when we see it. The trend makes a gradual rollover from up to down until it becomes clear that the market is heading the other way.

The ETF shows other, more traditional signals that things are not so good. For starters, it is one of a handful of country ETFs that has moved below its 200-day moving average -- a key benchmark for institutional investors. It also sports multiple support breaks, rising volume on the decline and bearish momentum conditions. In other words, it fulfills many technical requirements for a market in retreat.

The iShares MSCI Brazil Index Fund (EWZ) also has a rather weak looking chart (see Chart 2). While still above its 200-day average, the break of its bull-market trendline from March is quite clear.

Chart 2
[GT2]

Here, too, we see volume and momentum indicators supporting the bearish case.

For more advanced chart watchers, there is also an arguable head-and-shoulders pattern in play. This formation is defined by a failure to rally to new highs while the market moves mostly sideways, but that is not why it is worth mentioning. The value in adding this pattern to the analysis is that it is possible to use it to forecast a likely downside target.

By measuring the height of the central peak, or head, in the pattern and projecting it down from the break point, we get a first objective. For the Brazil ETF, that would be roughly 62, or 6% down from current trading. The total decline from the December peak near 80 would be more than 22%. That is a sizable correction in anyone's book.

Finally, the iPath MSCI India Total Return Index ETN (INP) shows a modest set of bearish technicals (see Chart 3). While technically still in a bullish trend from its March low, this market dipped under a shorter-term trendline drawn from the July low. It also sports the same problems with volume and momentum as its BRIC cousins.

Chart 3
[GT3]

Taken together, the technical breakdowns in these leading markets bode poorly for the rest of the emerging markets across the globe. Indeed, the iShares MSCI Emerging Markets Index Fund (EEM) suffered a false resistance breakout last month and a trendline breakdown this month (see Chart 4).

Chart 4
[GT4]

For investors, it is yet another sign that money is moving away from assets considered to be risky and toward assets considered to be safer. The mood of the market has indeed changed to one of caution.

http://online.barrons.com/article/SB126 ... =djembdr_h

[winston]

Emerging Equity Funds Post Most Outflows in 24 Weeks (Update2) By Shiyin Chen and Chan Tien Hin

Feb. 5 (Bloomberg) -- Emerging market equity funds lost $1.6 billion in weekly withdrawals, the biggest outflows in 24 weeks, as earnings and Greece’s debt woes raised concerns that the global recovery may falter, EPFR Global said.

Investors removed almost $1 billion from global emerging market stock funds in the week ended Feb. 3, the most in more than a year, and withdrew $516 million from Asian equities outside of Japan, the research company said in a statement.

During the week, developing-nation bond funds attracted $406 million, according to EPFR. Overall, equity funds with $3.1 trillion in assets lost $981 million while bond funds with $1.1 trillion in assets drew $4.6 billion in new inflows, the Cambridge, Massachusetts-based research company said.

http://www.bloomberg.com/apps/news?pid= ... 82gx7YkQzI

[winston]

US Relative Outperformance: Bearish Sign for Global Equity Markets? By Michael Panzner

The last time the ratio of the S&P 500 to the MSCI World index staged a bullish breakout was in the summer of 2008 — just before global equity markets fell off a cliff.

On it’s face, that doesn’t seem to make sense. For one thing, it contradicts anecdotal and other evidence that the U.S. tends to lead the way as far as equity markets are concerned.

In addition, the fact that America has been ground zero in terms of the financial crisis would seem to indicate that our markets should bear the brunt when investors run scared.

That has not been the case, however. As paradoxical as it sounds, there are two reasons why U.S. markets can outperform at a time of widespread de-risking — or, if you prefer, panic selling.

First, the U.S. has traditionally been seen as a global safehaven. So, while investors here and elsewhere might be cashing in some of their chips, those international fund managers who must remain invested in equities tend to shift funds towards more defensive locales — like the U.S.

What’s more, over the past ten months and in the period preceding the bursting of the credit bubble in 2007, data on mutual fund and other investment flows revealed that U.S. investors sent a lot of money overseas in a quest for higher returns.

But when return of capital suddenly becomes more a lot more important than return on capital, the direction of those cross-border flows can quickly change course.

In sum, things are not always what they seem.

http://www.ritholtz.com/blog/2010/02/us ... y-markets/

[winston]

Emerging-Market Stock Funds Post Outflows on Greece (Update2)

Feb. 12 (Bloomberg) -- Investors pulled the most money from emerging-market equity funds in 19 months as Greece’s debt crisis escalated and the Federal Reserve laid the groundwork for exiting its record credit expansion.

Outflows from emerging-market equity funds reached $2.9 billion in the week to Feb. 10, the highest since the period ended July 9, 2008, according to Cambridge, Massachusetts-based research firm EPFR Global in an e-mailed release.

“Investors fretted that Greece’s sovereign debt woes could drive up yields, and hence credit costs, worldwide,” EPFR said. “Further talk by U.S. Federal Reserve officials about an ‘exit strategy’ also weighed on sentiment.”

The MSCI Emerging Markets Index has declined 6.5 percent this year amid concern that Greece, Spain and Portugal may struggle to repay lenders as their budget gaps widen. That compares with the 4.9 percent drop in the MSCI World Index, which tracks developed markets. The developing-nation gauge surged a record 75 percent last year, more than triple the 23 percent gain by the Standard & Poor’s 500 Index. Brazil, Russia, India and China led gains among the major global markets in 2009.

High-yield bond funds posted outflows of more than $1 billion for their worst week since early in the third quarter of 2008, EPFR said. Japanese equity funds had net inflows for a seventh week, the longest since July 2008.

Asia ex-Japan Equity funds had their worst week since August amid concerns over a possible trade spat after the U.S. proposed to sell arms to Taiwan, EFPR said.

http://www.bloomberg.com/apps/news?pid= ... qKFblks5MU

[winston]

U.S., Japan Equity Funds Attract Inflows on Recovery (Update1)
By Lilian Karunungan and Reinie Booysen

Feb. 19 (Bloomberg) -- Investors pumped money into U.S., Japan and some emerging-market equity funds as economic data added to evidence of a recovery in the world’s largest economy, EPFR Global said.

Funds invested in U.S. stocks took in $3.14 billion in the week to Feb. 17, the biggest amount since mid-December, while Japan attracted $123 million, an eighth consecutive week of inflows, according to the Cambridge, Massachusetts-based research firm in an e-mailed release. Investors pulled $303 million from European equities as Greece’s debt crisis escalated.

“There’s a tug of war at the moment between earnings and macroeconomic numbers, which are generally improving, and the growing concern among investors that ballooning sovereign issuance and monetary exit strategies will combine to squeeze corporate and consumer credit,” EPFR Senior Analyst Cameron Brandt wrote.

U.S. stocks advanced this week as better-than-estimated earnings, industrial production and housing data bolstered investor confidence for an economic recovery. Data in the U.S. raised “hopes that the world’s leading consumer will regain its appetite” for exports from developing nations, EPFR said.

The Standard & Poor’s 500 Index advanced 2.9 percent so far this week, headed for its best performance since the period ended Nov. 6.

China Tightening

Investors withdrew $37 billion from money market funds in the week, while those invested in global stocks took in $3.69 billion, the company said. Global emerging-market equity funds posted the first inflow in four weeks, EPFR said, without providing data. Global bonds attracted $3.48 billion.

Data over the past few months showed that overseas shipments out of Taiwan, China, Thailand and the Philippines have started to recover from at least a year-long slump.

Latin American and China equity funds posted outflows in the week after Chinese authorities moved to tighten monetary policy, EPFR said, without providing data. China’s appetite for commodities from Africa, Latin America and Australia may ease, it said.

Funds focused on high-yield bonds posted a second week of outflows as Greece struggled to rein in its budget deficit and governments increased borrowings, EPFR said.

Governments and companies in developing nations from Turkey to Slovenia and Indonesia have raised $72.8 billion from debt sales so far this year, according to data compiled by Bloomberg. Indonesia sold $2 billion of 10-year bonds on Jan. 13 and the Philippines had sold $1.5 billion of debt the previous week.

http://www.bloomberg.com/apps/news?pid= ... fW2icNYyFk

[winston]

The Case Against Re-Emerging Markets by Brave Punditry

If you’re of a contrarian viewpoint you might cast your eyes across the pundit’s tips for the best performing sectors of 2010 – or, indeed, any year – with a slightly jaundiced eye. This year’s favourite flavour of investment is emerging markets. There are strong and powerful arguments in support of this particular long-term trend but you’ll rarely find the short-term value counterargument.

Counterarguments are critical for sensible value investors, because they force us to consider what could go wrong despite what our deceitful and biased brains are telling us. Any idiot can see what can go right – and, indeed, they spend a lot of time telling us about it – but putting a purely positive spin on any investing situation doesn’t come close to providing a sensible basis for allocating our valuable and scarce capital.

http://www.psyfitec.com/2010/02/case-ag ... rkets.html