Watch out for the Fed tightening. That’s the message from the Institute of International Finance, the bankers’ club, to investors ploughing funds into emerging markets.
Speaking in Switzerland on his way to the World Economic Forum in Davos, IIF managing director Charles Dallara warned that investors had “underanticipated” sudden turns in monetary policy in the past – and might do so again. He said: “Are we adequately risk aware? Are we adequately risk sensitive?… I am not at all sure that we are.”
The IIF’s latest half-yearly review of capital flows into emerging markets says private sector flows have “revived strongly” thanks to investors’ taking a more risk-friendly view of the world since mid-2012.
Davos 2013: warning to EM investors – remember 1994 | beyondbrics
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