PHILIPPINE SHARES are expected to continue to decline this week amid the continuous spike in coronavirus disease 2019 (COVID-19) infections in the country, which has forced several businesses to halt operations again to curb the spread.
The Philippine Stock Exchange index (PSEi) fell by 194.75 points or 2.93% to finish at 6,436.10 on Friday.
Week on week, the benchmark index shaved off 292.45 points from its 6,728.55 close on March 12.
“Last-minute selling forced the market to close at 6,436.10 [on Friday],” UPCC Securities Corp. Equities Trader Aristotle D. Reyes, Jr. said in a text message. “I think [it] has been affected by the news that the government might restrict again in some services.”
“For the past [few] days, we see the [COVID-19] cases going up and [hospitals getting] filled, so investors are getting cautious about the market again,” he added.
The Health department reported nearly 8,000 new COVID-19 cases on Saturday, the highest single-day tally recorded since the pandemic broke out. This brought the country’s total infections to nearly 660,000.
The Philippines is battling a renewed surge in infections, including those of the new and more transmissible variants, delaying the further reopening of its pandemic-stricken economy.
It has the second-highest 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 have been ordered to halt operations beginning March 22 to April 4, with local government units (LGU) also implementing their own restrictions.
“With the targeted lockdowns at the LGU level due to the virus infection spike and vaccination delays, local bourse valuation is looking expensive,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message on Friday.
“Investors are worried about [the] rising risk of a weaker than expected corporate earnings picture and so the PSEi’s downward bias,” Ms. Ulang added.
“But the silver lining that makes the PSEi dips an opportunity is the global growth recovery this year back to the [pre-pandemic] level according to rating agencies. That should filter [through] in the [overseas Filipino workers’] remittances, BPO (business process outsourcing), and exports,” Ms. Ulang said.
UPCC Securities Corp.’s Mr. Reyes said some stocks may see a recovery this week.
“But generally, [the] market will continue downward or sideways because investors continue to be wary of [COVID-19] cases in the country that might result [in] businesses shutting down again,” he added. — Keren Concepcion G. Valmonte with Reuters