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THE World Economic Forum is postponing an upcoming conference in Saudi Arabia, the latest example of a high-profile event affected by the Iran war.

The Global Collaboration and Growth Meeting, set to take place in Jeddah in April, will be rescheduled “in light of the current regional developments,” the organization said in a statement Tuesday. 

The announcement follows similar decisions by other groups to rethink events in the region amid the ongoing conflict. Private equity firm Partners Group Holding AG has moved its annual global gathering of investors to Switzerland from Abu Dhabi. 

Similarly, JPMorgan Chase & Co. is re-scheduling an invitation-only event for institutional investors, corporate executives and financial sponsors originally planned to be held in Dubai at the end of this month.

The WEF said its decision “reflects a commitment to convening the meeting under conditions that ensure its full strategic impact,” adding that it will provide a new date in due course. –BLOOMBERG

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PRESIDENT Donald Trump set off a rebound across markets by delaying planned air strikes against Iran’s energy assets, but many investors say the latest unpredictability just confirms their bias to cut back risk exposure.

US equity gauges jumped about 1% on Monday, and oil slid more than 10%, following Trump’s announcement of a five-day delay. Despite the rally, many fund managers are sticking to their view that investors should remain defensive due to the ongoing unpredictability. 

“I’m not sure if this is really the end of the Iran situation,” said Chauwei Yak, chief executive officer at hedge fund GAO Capital in Singapore, adding that she hasn’t changed positions in size. “We think things might stretch on for a bit more. We are generally cautious until there is an even bigger drop, then it becomes cheap, or there are clearer signs of the war ending.”

The outbreak of the US-Israeli war on Iran in late February has added a deep dose of uncertainty to global markets, with headlines creating a succession of intraday swings for financial assets. Far from being the short conflict that some originally envisaged, it’s continued to escalate, with surging energy costs raising the specter of stagflation for the global economy.

Trump’s decision to delay his ultimatum hasn’t changed the preferred trading strategy of Matthew Haupt, a fund manager at Wilson Asset Management in Sydney. Haupt had trimmed risk exposure ahead of the original deadline and still recommends smaller trading sizes until there are real signs of de-escalation. 

“The ‘sell the de-escalation’ and ‘buy the escalation’ seems to be right way to trade it still,” he said, adding that he expects there to be plenty of back-and-forth moves during any negotiations. “People are waiting to see Iran’s reaction. Then that will be the buy time, potentially.”

Asia’s benchmark stock index rose about 2% Tuesday following Trump’s decision. That still failed to recoup Monday’s drop of 3.4%.

At least some though are taking Trump’s decision to postpone his deadline as a positive.   

“We are actually a lot more constructive,” said Michael Brown, a senior research strategist at Pepperstone Group Ltd. in London. “There’s still a lot of uncertainty, but what’s important here is that we’ve now seen the first concrete sign from Trump since conflict began that he is seeking to find an off ramp and de-escalate the situation.”

The violent risk-positive reaction to Trump’s post in Monday’s session offers a bit of a teaser as to how markets might react if and when further concrete steps toward a ceasefire and commodity flow normalization take place, he said.

Many fund managers are maintaining hedges, holding higher cash levels and closely tracking oil prices and Federal Reserve policy signals. The shared view is that any near-term relief rally is fragile and largely driven by hopes of some de-escalation rather than a decisive resolution or shift in fundamental

Pictet Asset Management fund manager Jon Withaar said he hasn’t changed his positions, which include hedges as the unpredictability of the situation is making many investors fearful.

“There is still a buyers’ strike outside of nervous shorts,” Singapore-based Withaar said. “The Iranians don’t appear to want an off ramp.”

‘Cutting Through’

Several funds are reported to have been trimming their currency and rates positions since the start of the war, and Trump’s delay of the deadline still leaves those at the mercy of headlines.

“Not much has changed,” said Massimiliano Bondurri, chief executive officer at asset manager SGMC Capital Pte. in Singapore. “Following headlines and rumors is a recipe for disaster. Cutting through noise and resisting headline-driven reactions will be critical.”

“We advocate a more flexible and relatively lighter positioning, maintaining liquidity to deploy opportunistically to take advantage of price moves,” he said. –BLOOMBERG

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THE Philippines says grounding planes due to a shortage of jet fuel brought on by the war in Iran is a “distinct possibility,” according to President Ferdinand Marcos Jr (picture).

“Several countries have already told our airlines they cannot fuel their aircraft, so they have to carry fuel there and back,” Marcos said in an interview with Bloomberg News on Tuesday. “Long haul is going to be a much more serious problem.”

Asked whether, inevitably, planes may have to be grounded, Marcos said “we’re hoping not, but it’s a distinct possibility.”

Airlines in Asia are mapping out contingency plans as the escalating Middle East conflict threatens to trigger the worst oil shock since the 1970s. Because the Philippines relies heavily on imported crude — much of it sourced from the Middle East — it’s more highly exposed than other nations in Southeast Asia to energy shortages and spiraling domestic fuel prices.

Philippine budget carrier Cebu Air on Monday said it plans to reduce flights beginning next month because of surging fuel prices caused by the Middle East crisis, according to a statement.

Elsewhere in Asia, Vietnam Airlines is temporarily suspending flights on some domestic routes while VietJet Aviation JSC is reducing the frequency of flights. Another Vietnamese carrier, Bamboo Airways, said it will try to maintain flights during peak travel periods but has advised services may be fewer than last year if oil prices stay high.

Marcos’s comments appear to be at odds with a briefing Energy Secretary Sharon Garin gave earlier Tuesday. She said the Department of Energy had on Monday met with airlines and they’d told the agency they have sufficient fuel orders coming in.

“We met them because we wanted to know if they need help in procuring, but they have assured us they’re okay,” Garin said. –BLOOMBERG

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