Shares of the iShares MSCI Philippines Investable Market Index
) are soaring 2.2 percent Thursday, touched a new all-time high
at $42.47 and all that is happening on volume that looks poised
to easily eclipse the daily average.
The catalyst: Standard & Poor's raised the Philippines'
credit rating from BB+ to BBB-. Now the Southeast Asian nation
has garnered two investment-grade ratings from major ratings
agencies in just five weeks.
In late March, EPHE got a lift after
Fitch Ratings upgraded the Philippines'
long-term, foreign currency-denominated debt to BBB- from BB and
the long-term local currency-denominated debt to BBB from BBB
with stable outlooks on both ratings.
Fitch cited the Philippines' strong sovereign external balance
and persistent current account surplus. S&P likes the
improving macroeconomic outlook for the Philippines.
"The upgrade on the Philippines reflects a strengthening
external profile, moderating inflation, and the government's
declining reliance on foreign currency debt,"
Just a few days ago, S&P boosted its 2013 GDP growth
outlook for the Philippines to 6.5 percent from 5.9 percent. In
April, Moody's Analytics, a unit of Moody's Investors Service,
said it expects the Philippine economy to grow
6.5 percent to seven percent this year
Last October, Moody's raised its rating on Philippine debt to
Ba1, one level below investment grade territory.
Helped by the Philippines' status as the world's largest
call-center destination and the fact that Filipinos, broadly
speaking, are good English speakers, the country has been able to
attract some higher-wage, high-skill jobs that are not all
export-related. That has helped facilitate robust domestic demand
while damping the country's exposure to export sensitivity.
While there has been chatter among some market participants
that Japan's weak yen policy could lead to a lead to bubble in
the equity markets of some top-performing Asian emerging markets
such as the Philippines, EPHE's correlations to
the two largest Japan ETFs
are scant and S&P recently said the plunging yen could
actually help the Philippines.
In another sign investors are warming to the Philippine
investment thesis, EPHE had $205 in AUM in mid-December, but that
number is now flirting with $468 million,
according to iShares data
with decent exposure to the Philippines, the iShares Emerging
Markets High Yield Bond Fund (NYSE:
) is trading modestly higher today. EMHY's allocates 10.7 percent
of its weight the Philippines, making the country's third-largest
country weight behind Turkey and Venezuela. The $1.99 billion
actively managed WisdomTree Emerging Markets Local Debt Fund
) is also trading slightly higher Thursday. That ETF has a 3.7
percent weight to the Philippines.
For more on ETFs, click
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
Profit with More New & Research
. Gain access to a streaming platform with all the information
you need to invest better today.
Click here to start your 14 Day Trial of Benzinga