by winston » Sat Jan 09, 2016 5:27 am
Philippine Economy At Risk From Saudi Iran Tension?
By Shuli Ren
The Philippines has been held as an emerging markets safe haven because its stock market has few commodities plays and its economy is fairly insulated from China.
But the escalating tension between Saudi Arabia and Iran may well put a dent to the Philippine economic growth engine, worries J.P. Morgan. “We think 2016 will be challenging year for finding a positive absolute return from the PH equity market,” noted analyst Jeanette Yutan.
Specifically, overseas Filipino workers remit about 9% of the GDP back to their homeland. The Middle East is home to about 2.4 million overseas workers, or a quarter of the total, and accounts for 22% of annual remittances, with Saudi Arabia and UAE constituting 10% and 8% respectively.
Iran has accused Saudi-led coalition of damaging its embassy in Yemen. Saudi last weekend severed diplomatic ties with Iran and Sunni-majority UAE and Bahrain followed suit.
Year-to-date, the iShares MSCI Philippines ETF (EPHE) fell 5%.
Source: Barron's Asia
It's all about "how much you made when you were right" & "how little you lost when you were wrong"