Foreign investors continued to cut holdings in Chinese bonds in July and dumped equities for the first time in four months, according to a report by the Institute of International Finance (IIF).
Emerging markets posted a 5th straight month of portfolio outflows, setting the longest such streak; as global recession risk, inflation and a strong dollar drew away cash, showed the report.
Chinese debt witnessed outflows of around $3 billion last month, while $6 billion exited other EM, IIF estimated. It would be the sixth consecutive month of foreign outflows from China’s $20 trillion bond market.
During the same period, China’s stock market witnessed $3.5 billion of foreign outflows, compared with marginal inflows of $2.5 billion in other EM markets, IIF added.