Local shares sank to their lowest level in over two months on Friday, as investors sold on news that Metro Manila will be back to hard lockdown amid threats posed by the Delta variant.
It was a bloodbath at the Philippine Stock Exchange, sending the main index plummeting 3.48 percent to cap a turbulent week at 6,270.23. The broader All-Shares index lost 2.65%.
All sectoral counters were in the red, led by property firms which lost 4.98%. This was followed by holding firms (-3.31%), financials (-2.99%), industrial (-2.32%), services (-1.80%) and mining and oil (-0.68%).
Beatrice Lopez, equities analyst for Regina Capital, noted investors’ immediate concern on the impact of enhanced community quarantine (ECQ) in Metro Manila on the economy.
“Yes, I believe the ECQ played a factor on the market’s performance today,†Lopez said in a Viber message. “Investors would likely be concerned in the near-term over how the ECQ could affect economic recovery.â€
As the country detects more cases of the highly contagious Delta variant, the National Capital Region will be put under ECQ the strictest lockdown there is from August 6 to 20 to avert another deadly surge in infections that could overwhelm hospitals again.
But unlike the previous ECQ last March that covered the capital and four nearby urban areas, the new one would be limited to Metro Manila, in what seems to be an attempt to minimise economic damage. This time around, the government also granted businesspeople’s request for ample time to prepare for the looming lockdown. Vaccinations will likewise continue.
For Regina Capital’s Lopez, the main index is unlikely to crash to levels seen in 2020, when the announcement of first ever ECQ sent the local stock market to historic-lows.
“We aren’t in unexplored waters. To an extent, we’ve been here before, so it’s possible that the index would not fall as much as it did in March to April 2020,†she said, adding that she’s “looking at 6,000 as a key support level for now.â€
Elsewhere in Asia, Hong Kong, Shanghai, Tokyo, Sydney, Seoul, Wellington, Taipei and Jakarta were all in negative territory, though Singapore and Mumbai rose. It has been a volatile week for Asian equities as China’s regulatory crackdown continued to spook investors.
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Category: Philippines
