Asia ETFs Soft Amid Downgrade for Vietnam (VNM, THD, IDX, EWY, EWH, EWS, EPI, FXI, SCIN)
Despite an 18% gain in the past month, the Market Vectors Vietnam ETF (VNM) is enduring a 1% loss today after Moody’s Investors Service downgraded its rating on Vietnam’s sovereign debt to B1 from Ba3, pointing further pressure on the dong, Vietnam’s currency, a possible balance-of-payments crisis and inflation issues, according to the Wall Street Journal. The Vietnam news may be the main culprit behind the lagging Single Country Emerging Market ETFs Index, which is down 1.1%.
Moody’s reiterated its negative outlook on Vietnam while noting rising inflation will pressure the dong and perhaps spur the departure of capital from the Southeast Asian country. Vietnam’s rate of inflation touched 11% in November, the fastest pace in 20 months, the Journal reported.
The Market Vectors Vietnam ETF is the Index’s top performers in the past month, but a number of other ETFs targeting the region are joining it on the downside today. The iShares MSCI Thailand Invest Market Index (THD) and Market Vectors Indonesia Index ETF (IDX) are both down close to 1%, the iShares Msci-south Korea Index Fund (EWY) is off by more than 1% while the iShares Msci Hong Kong Index Fund (EWH) and iShares MSCI Singapore Index Fund (EWS) are both lower by 2%.
ETFs tracking Asia’s two fastest growing economies, China and India, may not be moving on the Vietnam downgrade news, but those funds are all lower today led by losses of 2% for the WisdomTree India (EPI) and iShares FTSE/Xinhua China 25 Index Fund (FXI) and a 3% slide for the Emerging Global Shares INDXX India Small Cap Fund (SCIN).
Investors can track the Single Country Emerging Market ETFs Index for performance trends and a suite of other metrics at tickerspy.com.
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