Foreign investors in retreat mode across most emerging markets

Analysts at Morgan Stanley see EM equities 'struggling' in 2022 as they battle gradual tightening of global and local monetary conditions and several other idiosyncratic headwinds

Foreign institutional investors (FIIs) have been in retreat mode across emerging markets (EMs). Over the past 12 months (since October 2020), they have withdrawn money from most EMs, including Taiwan, South Africa, Thailand, Malaysia, Philippines and South Korea, data shows. India, Indonesia and Brazil, however, have been an exception where the net FII flow has been still in the positive zone during this period, shows data.

“Covid-19 crisis seems to be on the wane. Interest rates are not going to go down anymore and liquidity (in EMs) is not going to get any better. Markets will eventually come back to