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Philippine stocks are expected to continue to decline this week amid the continued rise in 2019 coronavirus (COVID-19) infections in the country, forcing several companies to halt operations again to slow the spread.
The Philippine Stock Exchange Index (PSEi) fell 194.75 points or 2.93% to end at 6,436.10 on Friday.
Week-over-week, the benchmark was down 292.45 points from its close of 6,728.55 on March 12.
“Last minute sales forced the market to close at 6,436.10 [on Friday]”UPCC Securities Corp. stock trader Aristotle D. Reyes, Jr. said in a text message. “I think [it] it has been affected by the news that the government could restrict some services again ”.
“For the past [few] days, we see the [COVID-19] cases going up and [hospitals getting] full, so investors are again being cautious with the market, “he added.
The Health department reported nearly 8,000 new cases of COVID-19 on Saturday, the highest count on record in a single day since the pandemic broke out. This brought the country’s total infections to nearly 660,000.
The Philippines is battling a new surge in infections, including those of the newer and more communicable variants, delaying the reopening of its pandemic-ravaged economy.
It has the second highest number of COVID-19 cases and deaths in Southeast Asia after Indonesia.
Researchers from the University of the Philippines OCTA Research Group previously told ABS-CBN News Teleradyo that the country’s daily infections could reach 8,000 by the end of the month if the government fails to curb the spread of the virus. Several non-essential business establishments were ordered to halt operations from March 22 to April 4, and local government units (LGUs) also implemented their own restrictions.
“With specific closures at the LGU level due to increased virus infection and vaccination delays, the local exchange’s valuation looks expensive,” said First Metro Investment Corp. head of research Cristina S. Ulang at a Viber message on Friday.
“Investors are concerned about [the] growing risk of a weaker-than-expected corporate earnings outlook and thus the downward bias of the PSEi, ”added Ms Ulang.
“But the positive side that makes the PSEi falls an opportunity is the recovery of global growth this year [pre-pandemic] level according to rating agencies. That should filter [through] at [overseas Filipino workers’] remittances, BPO (business process outsourcing) and exports, ”said Ms Ulang.
Reyes of UPCC Securities Corp. said some stocks could see a recovery this week.
“But overall, [the] market will continue down or sideways because investors continue to distrust [COVID-19] cases in the country that could result [in] businesses closing again ”, he added. – Keren Concepcion G. Valmonte with Reuters
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