Coronavirus brings back painful memories to PSEi with new wave
MANILA, Philippines — A bad combo of surging coronavirus infections and new restrictions to arrest contagion reminded the market of bad memories from last year’s institution of lockdowns and ended at its lowest level in over 4 months.
In a bloodbath nearly reminiscent of how restrictions crippled the market last year, the bellwether Philippine Stock Exchange index (PSEi) closed down 2.62% to open the trading week at 6,553.46. That marked the weakest closing since Nov. 4 last year that ended at 6,464.05.
The broader all-shares index lost a bigger 2.7%.
The rout at the main bourse was so brutal throughout the day that the PSEi’s decline reached as low as 3.6% before moderating losses toward the day’s end. The sell-off was Asia’s worst, based on Bloomberg’s tracking.
“The drop in the PSEi today can be seen as the result of the market pricing in the surge in nationwide COVID-19 cases and unified curfew implementation in the Metro,” Arielle Santos, equity analyst at Regina Capital Development Corp. brokerage said in a Viber message when sought for comment.
Worse, the pain is unlikely to get relieved anytime soon. April Lynn Tan, head of research at COL Financial, said in a text message investors are likely to “stay depressed” for the rest of the week with no sign that the latest wave of COVID-19 infections is getting handled properly.
Coincidentally, Monday’s tail-spin happened 4 days away from the anniversary of a historic one-day slump in the PSEi that at the time, reacted to President Rodrigo Duterte’s abrupt decision to place Metro Manila under enhanced community quarantine for the first time.
That lockdown’s anniversary was marked on Monday, but its announcement last year was made approaching the weekend. The trading floor closed two days after that for adjustments, so the market reaction was delayed until March 19.
A year after, equity investors are still getting skittish for new and old reasons. On one hand, spiking number of infections that tallied to 5,404 on Friday, the biggest single day jump in 7 months, relives last year's containment struggle. On the other, new and more infectious COVID-19 variants are not only posing a challenge to government, but also worrying investors about how they would get addressed.
All these plus a decision in Metro Manila, the center of business and commerce, to re-impose curfews and liquor bans for 16 days beginning Monday have turned away investors, despite the latest restrictions' questionable effectiveness on controlling the virus' spread and definite depressing effect on the economy.
At the PSEi, investors just trying to get their groove back with the economy having reopened to an extent, have again signaled their aversion to uncertainty of lockdowns. All counters were in the red by mining and oil firms which lost 3.66%, followed by services which shed 3.01%.
Holding firms and property both went both down 2.86% each. Financials lost 2.55% and industrials dropped 2.18%.
Foreigners sold P1.12 billion in shares more than they bought. A total of 5.6 billion shares valued at P9.2 billion switched hands during the trading day.
PSEi led losses in a mixed bag of Asian market performance on Monday, having failed to sustain early momentum. Apart from PSEi, benchmarks in Shanghai, Seoul, Taipei, Mumbai, Bangkok and Jakarta all suffered a freefall. On the flip side, Hong Kong, Tokyo, Sydney, Singapore and Wellington all rose.
“For this week, if the rise in coronavirus infection continues to rise, index's support at 6,500-level will be put to a test. Furthermore, bearishness of RSI and MACD indicates that the bourse might follow a sideways path with a strong downward bias in the short-term,” Santos said. — with AFP
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