Investors and banks pumped half-a-trillion dollars into emerging markets last year, with China and other Asian economies accounting for the lion's share of such money flows, the Institute of International Finance (IIF) said on Thursday.
Last year's figure of US$502 billion was just slightly below the record level of US$509 billion in 2005, according to an IIF report.
The report by the global association of big financial institutions and banks, showed investors remained upbeat on countries with greater economic risks last year, but that this trend will likely moderate somewhat this year.
The IIF, chaired by Deutsche Bank AG chairman Josef Ackermann, said the volume of private capital flows to emerging markets was likely to total US$469 billion this year.
Although this would mark a slowing of overall capital flows, to the 30 countries covered in the survey, the IIF said it would still represent the third highest level of flows recorded.
The institute, however, cited several risks to its outlook, including "uncertainties about the duration and severity of the ongoing housing slump in the United States, as well as its impact on the rest of the economy."
The IIF said net private capital flows of US$197 billion went to Asia last year, while emerging European economies acccounted for US$218 billion. Some US$46 billion went to Latin America and US$31 billion to Africa.
The IIF said that Asian economic powerhouse China would likely continue to be the recipient of the largest share of net direct investment.
"China will continue to dominate in this category, accounting for US$55 billion of total net direct investment flows to emerging markets," the report said.
Europe's emerging economies are likely to receive the biggest share of commercial bank lending in the coming year, however, "accounting for 70 percent of all such lending to emerging markets," the report said.
The report's authors said they generally expected the world's financial markets to remain stable over the next 12 months.
Growth in Asia is seen exceeding 7.5 percent for the fifth straight year, with China's breakneck economy moderating to "a more sustainable" growth clip of 9.5 percent this year.
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