PSEi tanks below 7,000-mark to a two-month low
MANILA, Philippines — Local shares fell below the 7,000 mark on Tuesday to hit a 2-month low as investors stay on the edge of their seats ahead of the much-awaited release of data in economic performance, which is likely to reveal a still significant economic damage from the pandemic.
Suspense on the latest gross domestic product (GDP) report scheduled out Thursday morning sent the Philippine Stock Exchange index (PSEi) down 1.33% to close at 6,977.16, its worst performance since November 27 last year.
The broader All Shares index, meanwhile, tanked by a bigger 1.92%.
"The market's performance today can be attributed to the public's anticipation of the GDP announcement, which consensus thinks could contract from -3.7% to -12.2%," Arielle Santos, equity analyst at Manila-based brokerage Regina Capital, said in a Viber message.
Already, economists expect the Philippines to have sustained the biggest economic damage in the region from the pandemic last year, after prolonged lockdowns and the onslaught of strong typhoons in the fourth quarter complicated recovery. For the first 3 quarters of 2020, GDP collapsed by a record-breaking 10% year-on-year, data showed.
The Duterte administration itself expected GDP to have shrunk between 8.5-9.5% year-on-year in 2020, worse than their initial estimate of 4.4%-6.6% contraction.
"Investors took it (upcoming GDP announcement) as a hint to rebalance their portfolios," Santos said.
For Jonathan Ravelas, chief market strategist at BDO Unibank Inc., investors are already looking way past last quarter's GDP performance and toward the future, and President Rodrigo Duterte's rejection of plans to allow kids to go out signaled a tough year ahead, at least for the time being.
"This further dampened market's cautious stance ahead of a critical data on the 28 January the 4Q20 and full year GDP number," Ravelas said in a separate text message. "Should the actual data be closer to consensus, the PSEi could retest the 6,500-6,700 levels or a close below the January 6 low of 6,928.90 will also trigger the said move."
Broken down, it was a bloodbath across all sub-indices led by the mining and oil counter, which tumbled 5.37%. This was followed by financials (-1.79%), holding firms (1.77%), services (1.60%), property (1.30%) and industrial (0.24%).
Decliners trumped advancers, 209 to 29, while 31 companies were unchanged. A total of 74.5 billion shares valued at P11.6 billion switched hands during the trading day.
Foreign investors were among those who dumped local equities, resulting in a net foreign selling of P504 million.
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