Emerging Asia hit by outflows

Much has been said about soft spots and weakness in emerging market. Let's look at the hard facts.

• Investors taken out $ 2.4 billion out of emerging markets in the week till March 11 in Asia according to global funds tracker EPFR. The fund outflow increased as dollar strengthened across board and European equities continue to benefit from ultra-loose monetary policy by European Central Bank (ECB). Previous week the outflow was in tune of $338 million.

• Larger portion of the outflow came from equity funds in tune of $ 2.14 billion.

• South Korean won fell to two year low as the country's central bank reduced interest rate this week by 25 basis points and the country gets hit with outflows. Korean outflows totaled $965 million. Korean won is trading at 1129 against dollar, down 2.9% in one week.

• Indian stocks and currency lost grounds in today's trading even after much awaited insurance reform bill was passed last night in parliament. India's benchmark nifty is down close to 1%.

More bad news -

• Emerging market registered first outflow in six weeks. Outflow was $598 million compared to previous week's inflow of $ 698 million.
  
  
• The outflows were from local currency bonds.

Fund flows point that the pain for emerging market currencies are not done with and further might follow as real money is getting out avoiding currency risk.