Emerging-Market Funds Inflows on Growth, EPFR Says

(Bloomberg) -- Emerging-market equity funds received net inflows in the week to Aug. 26, rebounding from the biggest outflows in 2009, on optimism improving economic conditions in France, Germany and the U.S. will bolster exports. Investors put a net $168 million into funds for Asia excluding Japan, after pulling out $810 million the previous week, according to EPFR Global. China stock funds received a separate $480 million in the period, recovering from their worst week since the first quarter of 2008, as investors projected higher exports to developed markets, EPFR said.

The German and French economies both expanded 0.3 percent in the three months through June, unexpectedly returning to growth, and purchases of new homes in the U.S. jumped more than forecast in July. China’s Shanghai Composite Index has declined 14 percent this month, the biggest drop among 89 major stock gauges tracked by Bloomberg, on concerns government measures to curb bank lending will derail economic growth.The recovery in the German and French economies and U.S. home sales “allowed hope for exporters to offset lingering doubts about the durability of recent Chinese economic growth,” the Cambridge, Massachusetts-based research company said in an e-mail.

Taiwan, Indonesia
The MSCI Emerging Markets Index has rallied 50 percent this year, more than double the 21 percent gain for the MSCI All- Country World Index.Taiwan equity funds had their biggest weekly outflow this year, signaling fading optimism Taiwan can turn its improved relations with China into economic growth, according to the statement. Indonesian stock funds saw inflows of investor funds for an eighth straight week after President Susilo Bambang Yudhoyono won a second term in office.Taiwan’s Taiex index has retreated 6.3 percent since its July 28 high this year, while the Jakarta Composite Index fell 1.8 percent from the Aug. 11 peak. The Indonesian benchmark measure’s 74 percent gain this year makes it the world’s third- best performer among 89 gauges tracked by Bloomberg.