Investors cautious as EMs try to recapture assets

Brazil's elimination of foreign investment taxes has met with a mixed reaction as emerging market nations seek to restore their attractiveness to investors.

Countries including India and Brazil have launched efforts to reverse capital outflows this month as a sell-off in EM assets gathered pace. Most notably, Brazil scrapped a tax on foreign investment in fixed income on 4 June, and last week abolished a tax on currency derivatives in an attempt to stem the decline of the real – now at a four-year low against the dollar. Mark Mobius, executive chairman of Franklin Templeton’s emerging markets group, said Brazil’s reforms are a necessary move. “Brazil has got to show more capital friendly policies. Its spending requirements are getting ...