The honeymoon seems to have finally ended as investors are pulling their money out of what used to be considered by them the ‘belle of the ball,’ emerging markets. As the Middle East continues to shake and rumble as thousands take to the streets in demand of better government, better economic conditions, and more freedom, investors are not willing to take the ‘wait and see attitude’ and have re-located their capital in the ‘old dependables’, the western industrialized economies, even at the expense of lower interest rates.
According to financial analyst Maria-Laura Lanzeni of Deutsche Bank Research, global investors are withdrawing their cash out of many emerging markets, even if they are not connected to the Arab world.
"I believe it is a structural problem with some investment groups that invest in emerging economies," she told Deutsche Welle. “Many of those groups invested based on a trend but knew little about the countries' actual economies,” she added.