LOCAL SHARES are seen driven by investor sentiment on the coronavirus disease 2019 (COVID-19) outbreak amid tempering of the tides by the release of full year 2019 earnings by listed firms.

The benchmark Philippine Stock Exchange index (PSEi) closed Monday’s session down 182.34 points or 2.47% to 7,187.44, as the market moved in sync with the rest of global equities.

Trading at the PSE was closed yesterday due to the anniversary of the EDSA People Power Revolution.

“The COVID-19 is still expected to be the local market’s backdrop for tomorrow,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a text message Tuesday.

“Fears of a global outbreak, already signaled by mounting cases outside China such as in South Korea, is expected to linger,” he added.

South Korea has so far reported close to 900 cases of COVID-19 in the country, most of which are in Daegu City, Reuters reported yesterday. This prompted the South Korean government to do a test of all members of the Daegu church where the disease is believed to have spread from.

But the coronavirus outbreak can still be beaten, the World Health Organization (WHO) said on Monday, insisting it was premature to declare it a pandemic even though it had the potential to reach that level.

“The key message that should give all countries hope, courage and confidence is that this virus can be contained, indeed there are many countries that have done exactly that,” WHO Director-General Tedros Adhanom Ghebreyesus told a news conference in Geneva.

The Philippines is now considering imposing a travel ban on South Korea, which is being assessed by an inter-agency task force. The country has already banned travelers from China, Hong Kong and Macau, and previously Taiwan, but was lifted after it issued threats.

Mr. Tantiangco said the worsening situation of the COVID-19 outbreak across the globe continues to give a downward bias for the market. But if it were to take any cushion for today, he said it is the release of financial results by listed firms.

Scheduled to make earnings announcements today are Metro Pacific Investments Corp. and Wilcon Depot, Inc. Manila Electric Co. also reported its earnings last Monday, and SM Investments Corp., BDO Unibank, Inc. and Manila Water Co., Inc. are set on Friday.

“We have 2019 corporate earnings which is expected to help the market by at least tempering the losses brought by the epidemic scare. Range will be from 7,150 to 7,300 with a possible testing of the lower bound,” Mr. Tantiangco said.

AAA Southeast Equities, Inc. Research Head Christopher John Mangun also said in an e-mail that the market could decline today. He noted trading last Monday saw investors rushing to sell blue chips regardless of demand and price.

“We may see a minor bounce after this massive move lower, however, we believe that this market will continue to display weakness in the near term,” he said. — Denise A. Valdez with Reuters

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