UK suffers record equity outflows in year of turmoil

Bloomberg

UK stocks suffered record annual outflows in 2022, marking the seventh year in a row that investors have fled the country’s markets.
UK equity funds have had $26.3 billion of redemptions so far this year, according to data from EPFR Global. That coincides with a slump of 20% for the domestic-skewed benchmark FTSE 250 Index, the most since 2008. The FTSE 100 Index is up more than 1%, largely due to its exposure to commodity stocks that have soared.
The country has been roiled by political and economic troubles this year. The onset of a recession, inflation at a 41-year high, two prime ministers resigning and the highest number of strikes since the 1980s helped trigger selloffs in domestic stocks and the pound. That left London losing its crown as Europe’s biggest stock market to Paris.
“For the next year, I am less optimistic about UK stocks — we expect the market focus to switch from macro headwinds to microeconomics and earnings recession,” said Marija Veitmane, a senior strategist at State Street Global Markets. “The UK is less likely to do well, as earnings and profitability of UK companies are not the strongest, which may lead to underperformance.”
The outflows from UK equities are in stark comparison to global stocks, which saw net inflows of $166.5 billion in 2022 despite the biggest drop in the MSCI All-Country World Index since the global financial crisis.
US stocks tick higher
US futures ticked higher on Friday, with upcoming data expected to show a key inflation gauge slipped in November, potentially validating the Federal Reserve’s recent move to slow the pace of policy tightening.
Contracts on the Nasdaq 100 and S&P 500 indexes erased losses to trade higher on the day, with premarket gains led by oil companies. Tesla Inc. rose after billionaire Elon Musk said he would stop selling shares in the electric carmaker.
Europe’s Stoxx 600 gained, on track for its first weekly advance in three.
Elsewhere in markets, oil headed for a substantial weekly gain as Russia said it may cut crude production in response to the price cap imposed by the Group of Seven on its exports.