Investors have withdrawn $70 billion from developing country bond funds since the beginning of 2022, according to an analysis by JPMorgan Chase & Co. based on data from EPFR Global.
This is the largest capital outflow since JPMorgan began tracking this data in 2005.
Last week alone, net outflows from emerging markets bond funds amounted to $4.2 billion.
The growth of interest rates in developed countries increases the attractiveness of their assets and reduces interest in less reliable securities of emerging markets, writes the Financial Times newspaper. At the same time, the strengthening of the US currency increases the cost of developing countries to service the dollar debt.
In September, JPMorgan raised its 2022 emerging market bond fund outflow forecast to $80 billion from $55 billion, and the bank’s emerging markets analyst Milo Gunasinghe notes that investor capital outflows are unabated so far.
More and more investors are pessimistic about the prospects for the global economy and corporate profits, according to the results of a monthly survey of fund managers conducted by Bank of America Corp. (BofA).
According to the results of the July survey, the proportion of respondents who expect the economy to weaken in the next 12 months reached a record 79%, an increase of 6 percentage points (p.p.). The share of investors expecting corporate earnings to worsen over the next 12 months rose by 7 percentage points, also reaching 79%.
Stagflation in the global economy is expected by a record 90% of respondents compared to 83% a month earlier.
The survey, which included 259 investors managing $722 billion in assets, was conducted by BofA last week.
Investors have reduced exposure to risky assets to lows not seen even during the global financial crisis, “completely capitulating” in the face of a bleak economic outlook, BofA said.
The share of stocks in investment portfolios this month fell to the lowest since the collapse of investment bank Lehman Brothers in 2008, the share of cash balances reached 6.1%, the highest since October 2001.
Among the biggest risks, fund managers point to high inflation, a global recession, and a hawkish central bank.
At the same time, the proportion of respondents who expect inflation to slow down next year has reached its highest level since the global financial crisis.
BofA has been conducting surveys of fund managers since 1994.
JSC Ukrzaliznytsia turned to partners and financial donors with a request to provide non-refundable financial assistance for the company’s work in the conditions of war.
According to the company’s website, the funds will be used to continue evacuation and provide shelters to the civilian population, to help the company’s employees affected by military aggression, as well as to support the company’s activities during the military aggression of the Russian Federation.
“Against the backdrop of open military aggression against Ukraine, launched by Russia on February 24, which is now unfolding, Ukrzaliznytsia continues its work. The main priority today is to ensure the safety of the civilian population and its transportation to safer regions, to protect the life and health of workers. The Ukrainian Railways continues its activities, being at the forefront of humanitarian, evacuation and economic support for Ukraine,” the company said in a statement.
In addition, the company continues at its own expense to evacuate civilians from regions under shelling by Russian invaders. Thus, since the beginning of the war, more than 3 million people have already been evacuated to safer regions. In addition, cargo transportation is carried out to meet the needs of the state and business.
In addition, the company notes that Ukrzaliznytsia constantly records the facts of the destruction of the railway infrastructure and rolling stock. Risking their lives, railway workers are trying to quickly restore damaged equipment and tracks in order to ensure the continuous transportation of passengers and goods. Unfortunately, there are injuries and deaths of workers, members of their families, as well as the destruction of their homes as a result of attacks by the Russian military.
“Railroad workers are confident that the current situation will not stop Ukrzaliznytsia, but, on the contrary, will lead it to a new stage of growth and modernization. Therefore, the company seeks to continue the dialogue with its partners as soon as possible and at this difficult time highly appreciates financial donors, investors and partners who support Ukrzaliznytsia and provide irrevocable financial assistance,” the company’s website says.
Ukraine and Croatia have signed a Memorandum of Cooperation between the Council of Exporters and Investors, Ukrainian Ambassador to Croatia Vasyl Kyrylych has said.
“Today we have signed a Memorandum of Cooperation between the Council of Exporters and Investors under the Ministry of Foreign Affairs of Ukraine and the Croatian Economic Chamber,” Kyrylych wrote on his Twitter on Thursday evening.
The next stage of the countries, he said, is expected to be a series of joint projects.
More than 15 potential investors have shown interest in acquiring JSC First Kyiv Machine-Building Plant (formerly the Bilshovyk plant) at a privatization auction, the press service of the State Property Fund (SPF) of Ukraine has reported.
“As a result of high-quality preparation [of the enterprise for privatization], more than 15 potential investors have already shown interest in this asset, as evidenced by the non-disclosure agreements they signed to obtain detailed information on the enterprise,” the SPF said in a Friday press release.
The press service recalled that the SPF carried out “comprehensive work to stabilize this asset, defended the state interest in courts and returned the illegally alienated property, provided a deep audit of the enterprise and, despite all the obstacles, prepared the Bilshovyk plant for the privatization auction.”
The press service of the State Property Fund also declared attempts to impede the transparent privatization of the enterprise, and called them evidence of “the helplessness of the shadow employees separated from the large-scale state asset.”
“It is such a large-scale facility that the Bilshovyk plant is, which for decades was destroyed and was brought to a critical state: UAH 500 million in debt, seized property and destroyed production turned this facility into ruins – only for the illegal income of some individuals,” the press service said.
Ukraine is waiting for the arrival of investors from Israel and guarantees the protection of their investments, Ukrainian President Volodymyr Zelensky has said.
“Ukraine is waiting for Israeli investors, and the government and I personally guarantee the protection of all their investments. In addition, Ukraine is interested in studying and using Israel’s significant experience in the field of innovation,” Zelensky said during joint statements with Israeli President Isaac Herzog to the media.
He added that Israeli campaigns, in turn, can use Ukraine’s colossal potential as a new European technological hub.
Zelensky noted that today the volume of direct Israeli investments in Ukraine does not meet the potential of the two countries.
“New technologies, innovations, cybersecurity, healthcare, pharmaceuticals, space programs, banking, finance, construction, agriculture are just some promising areas for the development of investment cooperation between Ukraine and Israel,” the President of Ukraine said.
Zelensky also said that the Free Trade Agreement between Ukraine and Israel opens up new opportunities for strengthening bilateral economic interaction. The countries intend to increase trade volumes to the level that had been before the spread of COVID-19.
