It’s Stunning How Aggressively Investors Dumped Emerging Market Bonds This Week

June 28, 2013 Leave a comment

It’s Stunning How Aggressively Investors Dumped Emerging Market Bonds This Week

SAM RO JUN. 27, 2013, 8:31 PM 1,235 2

It’s almost unbelievable how rapidly investors are yanking their money out of the Emerging Markets. The sucking sounds particularly loud in the EM debt markets. “Emerging Markets debt-dedicated funds recorded net outflows of $5,578MM (2.19% AUM) for the week ending on June 26, 2013, reports EPFR,” said Morgan Stanley’s Robert Habib. “This is the largest outflows ever recorded by EPFR from EM-dedicated funds, twice as large as last week’s $2.6bn outflow. This is also a third of the net inflows into EM-dedicated funds year-to-date.” The numbers are breath-taking. And this is troubling as these developing economies are at risk of a sudden stop —the nightmare scenario where a country effectively gets shut out of the global credit markets. Earlier today, bond god Jeff Gundlach recommended investing in the emerging markets as a contrarian idea. Here’s a geographic breakdown: This chart offers some historical context to the magnitude of the outflow.

screen shot 2013-06-27 at 6.16.53 pm

 

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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