For the first time since 2006, the capital flight from BRICs sent their shares, bonds and currencies down in tandem. BRIC was composed of Brazil, Russia, India and China. Their move signified a closure to their 10-year affinity with the biggest emerging markets.
"Every decade, there's a theme that captures investors' imagination -- the 1970s was about gold, 1980s was all about Japan and 1990s was about technology companies," Ruchir Sharma stated in an interview on the phone on July 8. Sharma was a New York-based leader of emerging markets at Morgan Stanley Investment Management. He supervised emerging markets worth US$341 billion. "Last decade it was about the BRICs. That theme has basically run its course."
This year, the investors retracted US$13.9 billion from equity mutual funds capitalized in the four countries. According to EPFR Global, the amount was equivalent to 27% of 2005's inflows.
From the last quarter, the MSCI BRIC Index plunged 12%. The nation's currencies fell by 4.1% against dollar. Furthermore, the government bonds sank an average 0.6%.
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