Hedge Funds Dominated the Selling of Emerging Market Assets

According to Turkish Daily News Asia, hedge funds were mostly responsible for the recent emerging asset selloffs, “Hedge fund accounts were behind the bulk of the sell-off in emerging market external debt, a JP Morgan survey showed on Wednesday, noting that these accounts now have big short positions in the market.”

And the Philippines was one of the major losers, "At the country level we have seen a broad, but small reduction in exposure. The biggest reductions have been in Russia and the Philippines. Smaller reductions have come from Brazil, Turkey, Ukraine, Uruguay, Mexico and Ecuador. Argentina and Venezuela are little changed," the survey said.

So, the non passage of VAT, Abu-Sayyaf and suspected IPO rotations were clearly not the triggers or the causal factors and have a scintilla of relevance to the latest market carnage.