Market to remain weak this week

MANILA, Philippines — The stock market is likely to weaken further this week after suffering a bloodbath last week, marked by two episodes of tripping the circuit breaker and collapsing to levels in the vicinity of those seen during the global financial crisis period.

The market barometer Philippine Stock Exchange index tumbled by 14.42 percent week-on-week for the third straight week to 5,793.94 as investors cashed in their portfolios and held cash as confidence waned due to the rising number of COVID-19 cases in the country. 

The week’s close at 5,793.94 highlights the bears are in control, according to BDO Research.

Analysts said investors would take into account the impact of Metro Manila’s one month lockdown or community quarantine implemented over the weekend. 

The number of confirmed COVID-19 cases in the Philippines has risen to 111 as of this writing. 

With the sudden break below the 6,000 levels and 5,800 levels, there could still be some room for more downside toward the 5,500 levels, it said.

At the same time, it said that given the steep drop last week, there might be some bargain hunting for this week.

Traders said the market may still generally go down as widespread fears over COVID-19 in the world continue to make investors jittery. 

The virus has knocked down Wall Street, ending its 11-year bull run and this is expected to send ripples in global markets across the globe, traders said.

The Philippine stock market experienced a bloodbath last March 12 when it lost nearly a trillion pesos in market capitalization. 

The stock market made history and plunged 9.71 percent, breaching the 6,000 mark and finishing at 5,736.27 as investors rushed to sell their portfolios. 

The next day, the market managed to recover, finding a bit of comfort in Finance Secretary Carlos Dominguez’ orders to state pension funds to prop up the market. 

The Finance chief ordered the Government Service Insurance Corp. and Social Security System (SSS) to support the stock market by doubling their daily investments. 

As news of this spread, the market immediately pared its losses and ended the day in positive territory. 

While the general sentiment is negative, traders said market investors may find some prices irresistible and do some bargain hunting.