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Storm Hits Southeast Asia ETF


Southeast Asia country-specific exchange traded funds are taking a beating, with a tropical storm putting a halting governmental and financial systems in the Philippines and a deepening current-account deficit in Indonesia.

The iShares MSCI Philippines ETF (EPHE) declined 2.0% Monday. EPHE is down 17.9% over the past three months, but the fund is still 1.4% higher year-to-date.

Tropical storm Trami, or locally known as Maring, was almost stationary for over six hours inundating the region with monsoon rains and flooding, which forced the Philippine Stock Exchange to halt equity trading and settlement, Bloomberg reports.

The Philippine markets were also closed last year due to heavy rainfall.

Additionally, ETFs that cover another Southeast Asian country, including the the Market Vectors Indonesia ETF (IDX) and the iShares MSCI Indonesia ETF (EIDO) , are hovering around their worst levels in 14 months,  writes Victor Reklaitis for MarketWatch. [Enigmatic Indonesia ETFs: No Emerging Markets Refuge]

The central bank announced Indonesia’s current-account deficit widened to $9.8 billion in the second quarter from $5.8 billion in the first quarter. Moreover, the central bank has kept key rates unchanged, disappointing economists.

“In our view, Bank Indonesia missed a trick when it failed to raise its policy rate at last Thursday’s meeting. Choosing instead to tinker with its various reserve ratios, the market took the view that BI was not that concerned about the weakness of the currency,” Credit Suisse said in a Wall Street Journal report.

iShares MSCI Philippines ETF

For more information on the Philippines, visit our Philippines category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.