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Emerging markets' popularity with investors is ebbing as a strong dollar lures money away and commodity prices fall, but some governments promising tough economic reforms may stem the flow of capital leaving.
Emerging markets' popularity with investors is ebbing as a strong dollar lures money away and commodity prices fall, but some governments promising tough economic reforms may stem the flow of capital leaving.
"Reformers are performers," said
In
Craig Botham, an emerging markets economist at UK fund manager Schroders, said he expected success on those fronts "to lead to greater investment, picking up momentum going into 2016" but was only "cautiously positive" on similar claims by the government in Indonesia.
So far the two countries have had mixed success in retaining foreign portfolio capital.
According to Lipper -- a Thomson Reuters company that tracks the funds industry -- net sales for
In contrast, Indonesian-themed funds saw an outflow of 64 million euros. The country's president Joko "Jokowi" Widodo, who was elected in July, does not hold a parliamentary majority -- limiting his ability to deliver on his promises to liberalise the economy and attract more foreign investment.
OUT OF FAVOUR
Investors are also unenthusiastic about prospects for
"Economic populism remains a risk in
European equity funds focusing on
Brazil is another country losing friends in the City of London and on Wall Street following the re-election of left-leaning president Dilma Rousseff, who some doubt has the political clout to curb a budget deficit and control inflation.
One voice countering those others however is veteran fund manager Mark Mobius, who runs the Templeton Emerging Markets Investment Trust.
He said he thought
"We believe both