Oct. 16 (Bloomberg) -- Emerging-market equity fund inflows surged in the second week of October on optimism better U.S. corporate earnings signal increased demand for commodities, EPFR Global said.
Global Emerging Market equity funds received a net $2.1 billion and Emerging Europe, Middle East and Africa managers got $358 million, the biggest inflows this year, EPFR said in a statement e-mailed today. Asia ex-Japan funds received $823 million. China funds took in $130 million and Korea $128 million.
Fund purchases picked up on speculation U.S. and European demand for commodities and other emerging markets exports gained, “bolstered by a good start to the third-quarter earnings season and the latest Chinese trade numbers,” EPFR said.
China may report next week that its economic growth accelerated to 8.9 percent in the third quarter, a Bloomberg News survey of economists shows. Export declines slowed in September and the nation’s foreign-currency reserves swelled to a record $2.273 trillion, official reports showed Oct. 14.
The MSCI Emerging Markets Index of 22 developing nations rose 0.4 percent to 975.79 yesterday, a ninth-straight advance and the longest winning streak in four years. The MSCI index has gained 72 percent this year to the highest level in 14 months on speculation China will lead the global economy out of its first recession since World War II. China’s benchmark Shanghai Composite Index has climbed 64 percent this year.
Emerging-market stocks have room for further gains in the next one to two years because of earnings and economic growth prospects, Allan Conway, head of emerging-market equities at Schroder Investment Management, said Oct. 13 in Seoul.
Emerging Markets Bond Funds absorbed $967 million, the biggest weekly total since EPFR began tracking the data in 2001, the company said.
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