Economy
Global equity funds draw inflows on economic growth hopes
© Reuters. FILE PHOTO: A man walks near the New York Stock Exchange February 9, 2011. REUTERS/Eric Thayer/File Photo/File Photo
(Reuters) – Global investors turned net buyers of equity funds in the week to June 28 as solid economic readings fuelled hopes of U.S. growth, while China’s policy measures to bolster its economy further boosted sentiment.
According to Refinitiv Lipper data, global equity funds saw a net $2.81 billion in inflows after booking about $15.96 billion worth of outflows in the previous week.
Robust readings on new U.S. home sales and consumer confidence helped soothe investors’ worries over a looming recession as the Federal Reserve seeks to cool demand to tame inflation.
Chinese Premier Li Qiang said this week China would take steps to boost demand, invigorate markets and promote development, and added that its economic growth in the second quarter would be higher than the first quarter.
The U.S. and Asian equity funds attracted $2.1 billion and $1.16 billion, respectively, in inflows, while European funds saw about $1 billion worth of net outflows.
Sectoral equity funds, however, suffered net selling of $1.38 billion, with materials and consumer staples losing $530 million and $373 million, respectively, while utilities saw $303 million in outflows.
Meanwhile, global bond funds drew $6.95 billion in net purchases after posting about $857 million in outflows in the previous week.
Global government bond funds received a net $3.1 billion, the biggest inflow in five weeks. Investors also purchased $786 million worth of corporate bond funds but sold $1.04 billion of high-yield funds.
Money market funds recorded outflows for a third straight week, amounting to a net $31.68 billion.
Data for commodity funds showed that investors offloaded $728 million worth of precious metal funds in their fifth straight week of net selling. Energy funds also booked outflows of about $193 million.
Meanwhile, demand for emerging market funds sustained for a third successive week, with investors pouring a net $89 million and $14 million into equity and bond funds, respectively.
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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