Outflows from Russia unlikely to benefit Asian markets

A growing list of corporates and investors have committed to pulling their investments from Russia, leaving observers to ponder where the outstanding funds will flow.

Pressured to take a stance against Russia’s invasion of Ukraine last month, corporates and fund managers have stated their intention to pull investments from the market, with index providers, FTSE Russell and MSCI announcing last week that they would remove Russian stocks from their emerging market indexes.

While Asia might seem an attractive destination for this newly available capital, no one country in the region is likely to benefit significantly, at least in the short team, experts believe.

Russia’s expulsion from the indexes is unlikely to have a major impact on flows from passive funds tracking MSCI and FTSE Russell, because of Russia’s small representation in these...

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