Beijing crackdown spurs $2.6 billion Chinese equity outflow this week-IIF
Fortun comments on foreign withdrawals from Chinese equities following regulatory action against technology and education companies.
View detailsCapital flows explained: how cross border investment is measured, what drives emerging market flows, and Jonathan Fortun’s research on currencies and financing conditions.
Capital flows connect investment decisions in one economy with financing conditions in another. This page brings together an introduction to their measurement and Jonathan Fortun’s research on emerging markets, exchange rates and the transmission of global financial conditions. The publication archive below links to the original work and distinguishes authored research from media commentary.
Capital flows are cross border financial transactions: for example, an investor buying another country’s bonds, a company financing an overseas operation or a bank making a foreign loan. The category matters. Direct investment, portfolio investment and bank related flows describe different relationships and can behave differently. A portfolio flow estimate is therefore not a measure of every form of international financing.
A useful first question is whose activity a number describes. Nonresident purchases of domestic assets and residents’ purchases of foreign assets are different sides of the external financial relationship. Even a series called “inflows” may already subtract sales from purchases within its category. Read its definition before comparing it with a net flow total.
A flow covers a period; a stock describes a position at a date. A change in the value of foreign holdings can reflect prices and exchange rates as well as transactions. It should not automatically be interpreted as new money entering or leaving a country.
Country definitions also matter. Residence locates an entity in an economy; nationality can group it with the country of its controlling parent. The BIS explanation of residence and nationality shows why the two perspectives answer different questions. Before comparing regional totals, check which countries, investors and instruments are included.
Analysis often separates global “push” factors, such as international financial conditions, from domestic “pull” factors, such as an economy’s outlook and institutions. Their relative importance can change across periods and types of investment. The IMF literature survey on capital flow determinants provides a starting point for this distinction.
For a particular episode, the analytical task is to connect the financing decision to the receiving economy. Is a change broad across markets or concentrated in a few countries? Does it concern equity or debt? Does the adjustment appear in an exchange rate, a borrowing cost or the quantity of financing available? These questions are more informative than treating every rise in inflows as the same economic event.
High frequency indicators can help track developments before full balance of payments statistics arrive. Their coverage and construction differ, so they are not interchangeable. The IMF guide to capital flow data discusses these measurement differences and the use of timely portfolio flow proxies.
For any release, identify its observation period, publication date, country universe and revision policy. Compare like with like: a monthly estimate with another monthly estimate, and the same investment category with itself. When a source revises history, retain the distinction between the original reading and the latest estimate. A timely signal can be useful without being a complete picture.
Bond issuance describes securities being created; investor flow measures describe investment transactions. Gross issuance can include refinancing. Net issuance deducts redemptions, as set out in the BIS securities glossary. Neither number alone establishes who bought the bonds or the economy’s total net capital inflow.
Jonathan Fortun’s work connects portfolio allocation with exchange rates, external balances and financing conditions. Follow the dated publications and commentary below for the argument and evidence behind a specific episode. Institutional research retains its publisher and coauthors; a journalist quoting Jonathan remains the author of that reporting.
The Japan research theme examines another perspective on international capital allocation. The Bolivia economy theme follows monetary and foreign exchange constraints in a receiving economy. The professional biography connects these interests, and the press kit provides attribution for interviews and introductions. This reference page does not redistribute the IIF’s underlying datasets.
295 results
Fortun comments on foreign withdrawals from Chinese equities following regulatory action against technology and education companies.
View detailsEmerging markets received $28.1 billion in portfolio inflows in June 2021, according to Jonathan Fortun’s July tracker. Debt attracted $18.9 billion, exceeding the $9.2 billion entering equities. Chinese equities accounted for $5.2 billion of those equity inflows. The breakdown distinguishes the stronger contribution from debt markets from the concentration of equity investment in China.
Read the workFortun explains how new debt issuance and investment in China supported a rebound in emerging-market portfolio inflows despite a more hawkish Federal Reserve.
View detailsThe article discusses an IIF report coauthored by Fortun on the Brazilian real's valuation after its pandemic-era depreciation.
View detailsCoverage quotes Fortun on the uneven recovery of emerging-market capital flows and the role of policy credibility.
View detailsFortun explains how emerging-market real yields attracted foreign investors in April, when Chinese equities took most equity inflows and other emerging-market bonds drew substantial investment.
View detailsFortun contrasts weaker emerging-market equity flows with China's support for overall inflows, in an analysis of Beijing's financial-opening and stability challenges.
View detailsChina accounted for almost all emerging market equity inflows in March 2021. Jonathan Fortun reports $10.1 billion in total portfolio investment, including $6.2 billion in debt and $3.9 billion in equities. Chinese stocks received $3.8 billion, exposing the narrow geographic base of the equity recovery.
Read the work