MARKET ANALYSTS said Securities and Exchange Commission (SEC) Chairperson Francisco Ed. Lim’s retracted claim that corruption issues wiped out P1.7 trillion in market value was an honest mistake and unlikely to have a lasting effect on investor confidence or the broader market.
“It’s just an honest mistake; the basis was a fake news article circulating before claiming that it came from a reputable source,” COL Financial Group, Inc. Chief Equity Strategist April Lynn Lee-Tan said in a Viber message.
She noted that Mr. Lim’s observation on market sentiment had merit. “Atty. Lim is not wrong in saying that the ongoing corruption issues are hurting sentiment for stocks. It’s just difficult to measure how much.”
Jarrod Leighton M. Tin, equity research analyst at DragonFi Securities, Inc., said the incident is not a significant cause for concern.
“It’s unlikely to have any lasting negative impact on investor confidence in the SEC or the broader market. In fact, it may even come as a relief that reports of P1.7 trillion in market value losses were unfounded. This clarification should be viewed as a positive development for overall market sentiment,” Mr. Tin said.
He added that market movements respond to multiple factors, including company performance and the broader economy, rather than isolated comments from officials.
“I don’t believe the SEC Chair’s statement had any meaningful influence on investor sentiment or stock performance last week. It’s easy for headlines to become sensationalized, especially when prominent figures mention large numbers, but investors tend to focus more on underlying fundamentals than on isolated remarks,” Mr. Tin said.
He advised investors not to overreact to alarming headlines, urging them to assess whether a company’s fundamentals have truly weakened before selling.
“The market seems to be back to business as usual. This should help calm investors and remind them not to overreact to exaggerated headlines,” Mr. Tin added.
On Friday, the benchmark Philippine Stock Exchange index (PSEi) fell 0.32% or 19.61 points to close at 6,037.79, while the broader All Shares index dropped 0.23% or 8.57 points to 3,658.44.
On Thursday, Mr. Lim clarified his earlier comments made during a speech at the Financial Executives (FINEX) forum on Oct. 7, acknowledging that the report he had referenced was “fictitious.”
“The information, which had been circulating within business circles and cited by some media outlets, was based on what I believed at the time to be a credible industry report. I have since learned that the report was fictitious. I deeply regret any confusion or concern that my statement may have caused,” Mr. Lim said in a statement.
The clarification came hours after Special Assistant to the President for Investment and Economic Affairs Frederick D. Go debunked claims of a 12% drop in the Philippine stock market.
Data from the Philippine Stock Exchange (PSE) showed only a 1.58% decline from Aug. 11 to 29, with market capitalization down 1.4%, disproving the exaggerated P1.7-trillion figure circulating online.
“I have personally confirmed this with the PSE President and the top brokers in the stock market,” Mr. Go said. — Alexandria Grace C. Magno
