Page 103 - RusRPTSept21

8.3 Stock market
8.3.1 Equity market dynamics
Investors are most concerned of EM risk since July 2020. Russian assets saw net c$80mn outflows from combined equity and bond fund flows in the week ending August 27 versus c$70mn during the previous one, the second worst week ytd.
“Outflows from both GEM equity and bond funds made last week the worst for EM flows since July last year. Russia-dedicated funds also reported net outflows. Investors appear to be least optimistic on the near-term prospects of the asset class in the face of looming QE tapering, negative,” says BCS GM.
Equity fund flows:
Russia-dedicated: c$80mn out (vs c$120mn in the previous week) – 11 weeks of outflows
Combined: c$50mn out (vs c$60mn in the previous week) – 7/8 weeks of outflows
Bond fund flows:
Russia-dedicated: : c$10mn out (vs c$5mn inflows in the previous week) Combined: c$30mn out (vs $20mn in the previous one) – second worst in 3Q21
Equity: second week of outflows from GEM funds ytd. Another week of outflows from Russia-dedicated funds with a total of 11 consecutive weeks of outflows from this fund category driven primarily by ETFs. More importantly, GEM equity funds reported just second week of outflows in 2021 and since September 2020, as they lost $109mn last week. As a result, combined outflows from Russian stocks from all fund categories have been registered in seven out of past 8 weeks – as we anticipated 2H21 is not as easy walk for equity markets as 1H21. Most EMs are rightfully considered net losers from looming QE tapering and gradual reversal of yet another period of cheap money with the only seriously debatable question of when that should start. Hence, EM underperformance may continue for now.
Bonds: outflows from EM bonds continue unabated. Outflows from GEM bond funds continued unabated as another $506mn left the asset class. Outflows
103 RUSSIA Country Report September 2021 www.intellinews.com