Stocks decline further on extended quarantine

stocks decline further on extended quarantine - Stocks decline further on extended quarantine

LOCAL SHARES continued to drop on Wednesday as investors weighed the repercussions of relaxed quarantine measures for September.

The benchmark Philippine Stock Exchange index (PSEi) gave up 60.85 points or 1.04% to close at 5,738.39, while the broader all shares index erased 27.25 points or 0.77% to end at 3,474.01. Wednesday marked the fifth straight day that the PSEi posted a decline.

“The market ended lower today as market participants continue to digest the government’s decision to put major cities of the country under (general community quarantine) for another month. Investors may be digesting the effects that this may bring to the economy,” Timson Securities, Inc. Trader Darren T. Pangan said in a mobile message on Wednesday.

Luzon was first put under strict lockdown in mid-March when the coronavirus outbreak widened in the country. Since then, major cities and regions have remained under quarantine, making the Philippines’ lockdown one the longest and strictest in the world.

These restriction measures have forced several companies to remain on limited operations. Most consumers are also staying home due to the continued rise in coronavirus infections.

The impact of consumer apprehension is particularly seen by investors in property companies, especially those that operate malls, AAA Southeast Equities, Inc. Research Head Christopher John Mangun said.

“The PSEi ended lower again…as ALI (Ayala Land, Inc.) dragged the whole index lower. Investors were selling heavily all day as the company was seen to take a bigger hit compared to its rival (SM Prime Holdings, Inc.),” he said in an e-mail.

He noted ALI’s mall segment is heavily dependent on rent, whereas SM Prime operates department stores and supermarkets, which are allowed to operate despite the lockdown.

“The PSEi is due for a technical bounce as it approaches its strong support of 5,690. We may see it recover in the coming trading days,” Mr. Mangun said. “The general investor sentiment remains extremely cautious, but with prices being at a 10-15% discount from its June highs, we may see some bargain hunting.”

Nearly all sectoral indices ended trading in red territory on Wednesday. Property dropped 67.53 points or 2.53% to 2,595.36; financials fell 18.57 points or 1.63% to 1,118.56; mining and oil decreased 61.03 points or 0.98% to 6,158.63; holding firms shaved off 35.90 points or 0.6% to 5,933.27; and industrials trimmed 10.96 points or 0.14% to 7,837.73.

The sole gaining index was services, which increased 1.15 point or 0.07% to 1,454.70.

Some 1.51 billion issues valued at P6.38 billion switched hands on Wednesday, lower than the previous day’s 1.87 billion issues worth P6.86 billion.

Decliners outnumbered advancers, 111 against 64, while 55 names ended unchanged.

Net foreign selling ballooned to P1.64 billion on Wednesday from the P261.55 million logged in the last session. — Denise A. Valdez

Leave a Reply

Your email address will not be published. Required fields are marked *