Investors scrambled to sell out of the stock market on Monday.
It was because they braced for a bigger macroeconomic fallout from the reimposition of tighter lockdown protocols in Metro Manila and surrounding regions.
The main-share Philippine Stock Exchange index (PSEi) fell by 212.53 points or 3.59 percent to close at 5,715.92. It made the worst performer in the region. About P1.64 billion worth of foreign funds flowed out of the market on a net basis.
ING Philippines economist Nicholas Mapa said in a research note.
“With the economic growth engine crippled, the continued spread of the virus weighs on any hopes of a recovery. COVID-19, acting like kryptonite to once Super-consumption, has not been removed and the former juggernaut economy. Then, it was now reduced to a form not seen in decades. Unless the kryptonite is addressed, no amount of alphabet rearrangements to lockdown measures and relaxing of quarantine protocols will jumpstart the recovery.”
COVID-19 Affected Shares
Investors dumped shares of top companies such as Ayala Property, Jollibee, BPI, Protection Bank, GT Money, SM Prime, SM Investments, BDO and Ayala Corp. on the local stock market as soon as Malacañang returned to modified enhanced community quarantine (MECQ) for the metropolis and other main regions.
“Investors rushed to close positions today. It was after Metro Manila and surrounding cities that placed under stricter quarantine restrictions for the next two weeks. The move caught most investors off guard. It was because the government struggles to restart an ailing economy,” said Christopher Mangun, head of research at AAA Equities.
With the daily COVID-19 case count seemingly doubling in a little less than a week and total infections exceeding the 100,000 marks, ING’s Mapa said that the authorities in the Philippines had no choice. But, to hunker down and use drastic measures to stop the virus spread.
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