Stock market index declines 20% in H1

MANILA, Philippines  — The Philippine Stock Exchange index (PSEi) has dropped 20.6 percent in the first half of the year, according to data from the Philippine Stock Exchange. PSE president and chief executive officer Ramon Monzon said the index has not yet recovered to its levels prior to the coronavirus disease 2019 or COVID-19. “While the index may have recovered from oversold levels it has not been able to climb back to its pre-COVID-19 levels indicating that investors are still quite wary about the full impact of the virus on the economy and are concerned that the number of cases continue to increase despite the various community quarantine regimes we went through” Monzon said.

Monzon said foreign funds have left emerging markets including the Philippines as a result of the COVID-19 pandemic. “Even if there are attractive bargains in emerging markets, foreign institutional funds prefer to sit it out. Fortunately, local investors readily took over the buying momentum and kept our market resilient. In April and June, we noted that locals were responsible for 53 percent and 58.9 percent of value turnover,” Monzon said. Quarter on quarter, however, the PSEi rose 16.7 percent. It also rebounded by 34.3 percent from its lowest closing level for the year of 4,623.42.

All sectoral indices were also down during the first half. The services sector decreased 8.3 percent while the remaining sectors posted double digit losses at the end of the semester, ranging from 15.0 to 35.6 percent. Daily average trading value turnover was at P6.59 billion, down by 15.9 percent. Foreign funds continued to dump Philippine shares with P68.44 billion, a marked reversal from the P21.26 billion net foreign buying registered at the end of June 2019.

 In terms of capital raising, the PSE recorded P20.83 billion during the period. This amount came from one initial public offering (IPO), one follow-on offering, one stock rights offering, and two private placements. “After the successful IPO of MerryMart Consumer Corp. and the listing by way of introduction of Altus Property Ventures Inc. in June, we hope to have two to three more capital raising activities for the rest of the year,” Monzon said. Monzon hopes this will help prop up trading activities and encourage real estate investment trust (REIT) listings.