‘Circuit breakers’ save PSEi from back-to-back freefall
MANILA, Philippines — Philippine equities bounced back Friday after investors picked up badly beaten-down stocks following a brutal rout in the morning trade, which prompted regulators to temporarily stop trading for the second time in a week.
Investors immediately rushed for the exit door shortly after the opening bell, with the Philippine Stock Exchange index (PSEi) tumbling 10.43% to an intraday low of 5,097.90 in the morning. To curb panic-selling, “circuit breakers” were triggered anew, just a day after the local bourse saw P933.35 billion of its market value wiped out.
Friday’s brief trading halt for 15 minutes — it can only be activated once a day — managed to curb the bloodletting and helped PSEi close the week in a positive note. The index went up 1% or 57.67 points to close at 5,793.94. The broader all-shares index was up a lower 0.03% or 0.87 points to 3,493.64.
“Panic sellers turned into bargain hunters after triggering circuit breakers early in the session...,” Luis Limlingan, head of sales at Regina Capital, wrote in a market commentary.
Half of the subindices rebounded to the positive territory, led by financials which gained 3.79%, followed by services (3.42%) and holding firms (1.30%). The rest finished in the red, with mining and oil losing 4.72% while property and industrial shed 2.50% and 0.65%, respectively.
Similar to the previous day, decliners still swamped advancers, 139 to 87, while 36 names were unchanged.
Compared with the previous week however, PSEi ended trading 14.4% down from last Friday as investors tried to wrapped their heads around an eventful week. From an accelerating spread of the coronavirus disease-2019 (COVID-19) to an oil price showdown that saw Saudi Arabia pumping out oil and lowering prices even more, investors are due for a breather.
But Beatrice Lopez, also of Regina Capital, said the reprieve could prove to be temporary. If not resolved, the confusion over how the Metro Manila's month-long community quarantine will be implemented, may trigger another bloodbath on the trading floor next week.
At the onset, Lopez said the market seemed unimpressed by how Duterte attempted to assure the public that the spread of COVID-19 is under control. “The uncertainty surrounding the community quarantine wasn't completely alleviated by last night's press conference, triggering another gap down in the index,” she said.
“Given that the number of cases continue to climb not only in the Philippines but also abroad, it's likely that this sentiment will also persist,” she added. A total of 52 cases of COVID-19 have been recorded as of Friday morning.
Asian markets in freefall
The PSEi defied a bearish regional sentiment. Tokyo, which fell as much as 10% at one point, ended down 6.1%, while Hong Kong was 1.6% lower in the afternoon having plunged around seven percent earlier.
Seoul, Bangkok and Singapore all just managed to cut their losses by more than half, while Mumbai was up more than 2% just hours after a trading halt kicked in because it had fallen more than nine percent. Shanghai ended down 1.2%.
Forager Funds' Steve Johnson described the day's trade as "completely and utterly nuts".
The Dow lost 10% in its worst session since 1987, while London also had its worst day since that year. Frankfurt had its blackest day since 1989, the year the Berlin Wall fell, while Paris suffered its biggest one-day loss on record. — with AFP
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