Overall, foreign investors added $37.4 billion to emerging market portfolios last month, with fixed income attracting $14.4 billion in the strongest monthly inflows so far this year.
Flows to Chinese equities also posted their largest monthly increase this year at $8.5 billion, but Chinese debt continued to see outflows that now total almost $77 billion in 2022.
"Non-resident investor flows to China have essentially ground to a halt, which is consistent with anecdotes we pick up from market participants who have become more attuned to geopolitical risk," said IIF economist Jonathan Fortun in a report alongside the flows data.
China this week eased COVID-19 quarantine rules in a major policy adjustment which could reverse the flow of cash back into portfolios in the world's second-largest economy.
Chinese stock indexes have had a rough year, and the low prices have enticed investors even before the new COVID rules. Shanghai stocks rose nearly 9% last month and are down 12% YTD while Hong Kong, down 17% so far in 2022, added 27% last month alone. The China MSCI index, priced in dollars, rose almost 30% in November.
The yuan gained 3% last month against the dollar but remains down near 9% this year, still on track for the largest yearly losses in almost three decades.
IIF regional data showed an inflow of $25.6 billion to Asia, while Latin America took in some $8.2 billion, the most since March, and emerging Europe another $3.2 billion. Africa and the Middle East took in $0.4 billion in the first positive reading since March.
(Reporting by Rodrigo Campos; Editing by Chizu Nomiyama)
By Rodrigo Campos
