Emerging market stocks are once again whetting the appetite of investors, with previously sidelined emerging market ETFs — exchange traded funds — seeing their fourth consecutive week of inflows, reports Bloomberg. Recent inflows pushed EM ETFs into the green YTD for the first time since April, with USD 1.8 bn worth of inflows pushing the collection of ETFs to a net positive of USD 880.4 mn

“After years of being unloved and overlooked, EM equities are seeing significant demand as allocators step up their need for geographical diversification,” said Global X portfolio manager Malcom Dorson. Moody’s downgrading the US’ sovereign credit rating by one notch to AA1 has added “fuel to the fire, and we think this rally is sustainable,” he added.

Growing risk appetite drove the Avantis Emerging Markets Equity EFT to record inflows upwards of USD 1 bn last week — marking its best ever week and accounting for more than half of EM ETFs listed stateside.

But zooming into which EM assets have become the most attractive, China is the clear front runner, with inflows reaching USD 669.1 mn last week following a temporary trade war truce between the US and the world’s factory. With trade war concerns at bay — for now at least — traders are now pricing in a much lower possibility of a coming global recession, which is good news for emerging market stocks.

MARKETS THIS MORNING-

Asian markets are mixed in early trading this morning. The Shanghai Composite is up 0.1%, the Hang Seng and Kospi are both in the green, looking at gains of 0.4% and 0.7%, respectively. Meanwhile, Japan’s Nikkei is down 0.2%.

ADX

9,707

+0.4% (YTD: +3.1%)

DFM

5,467

-0.4% (YTD: +6.0%)

Nasdaq Dubai UAE20

4,527

+0.4% (YTD: +8.7%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

4.1% o/n

4.0% 1 yr

TASI

11,438

+0.3% (YTD: -5.1%)

EGX30

31,629

+0.9% (YTD: +6.3%)

S&P 500

5,940

-0.4% (YTD: +1.0%)

FTSE 100

8,781

+0.9% (YTD: +7.4%)

Euro Stoxx 50

5,455

+0.5% (YTD: +11.5%)

Brent crude

USD 65.38

-0.2%

Natural gas (Nymex)

USD 3.43

+0.1%

Gold

USD 3,307

+0.7%

BTC

USD 106,085

+0.5% (YTD: +13.4%)

Chimera JP Morgan UAE Bond UCITS ETF

USD 3.60

+0.0% (YTD: +1%)

S&P MENA Bond & Sukuk

143.0

-0.2% (YTD: +2.2%)

VIX (Volatility Index)

18.09

-0.3% (YTD: +4.3%)

THE CLOSING BELL-

The ADX rose 0.4% yesterday on turnover of AED 1.4 bn. The index is up 3.1% YTD.

In the green: Abu Dhabi National Takaful Co (+13.1%), Hayah Ins. (+6.4%) and Rak Co for White Cement & Construction Materials (+3.8%).

In the red: Aram Group (-2.9%), Gulf Cement Co (-2.9%) and Presight AI Holding (-2.7%).

Over on the DFM, the index fell 0.4% on turnover of AED 613.9 mn. Meanwhile, Nasdaq Dubai rose 0.4%.

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