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Emerging Markets (EM) Asia, excluding China, experienced a challenging year-end with cumulative inflows into debt and equity markets closing at negative $840 million by the end of 2024, according to Bank of America.
This stagnation in inflows has persisted since November, primarily driven by broad-based equity outflows and foreign selling in Korea and Malaysia bonds.
The daily cumulative inflows concluded the year at a negative $840 million, a stark contrast to the peak inflow of $30 billion observed in October. The fourth quarter of 2024 saw significant foreign equity selling, particularly in India.
December alone marked a notable disparity between equity and debt flows, with equities experiencing sustained outflows totaling $19.92 billion, while debt inflows plateaued at $19.08 billion. This level of annual inflows into debt markets is the strongest recorded in over four years.
Across Asian equity markets, all but India and Taiwan faced outflows in December 2024, with Korea experiencing the highest followed by Malaysia and Indonesia. Conversely, the EM Asia ex-China cumulative debt inflows witnessed a slight rise to $19.08 billion by the end of December, up from $16.5 billion in the previous month, continuing to represent the highest inflows since 2020.
In the bond markets, December brought outflows for China, Korea, and Malaysia. In contrast, the bond markets in India, Indonesia, and Thailand attracted foreign inflows, suggesting a mixed performance within the region's debt markets.
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