PSEi extends losses as Omicron variant spooks investors

MANILA, Philippines — Local equities capped the month of November on a sour note on news of a new coronavirus variant that is heavily mutated and is feared to have the ability to reduce vaccine effectiveness, posing a fresh threat to recovery.

Anxiety returned to the trading floor of Philippine Stock Exchange on Monday, sending the bellwether PSE index (PSEi) down 1.07% to close at 7,200. The broader All-Shares index, meanwhile, shed 0.86%.

Most of the sub-indices fell except for the services index, which gained 0.51%. The industrial counter led the pack of losers after shedding 1.71%, followed by holding firms (-1.53%), financials (-1.05%), property (-0.82%) and mining & oil (0.47%).

Equities around the world went into freefall as the new Omicron variant forced several governments to throw up flight bans from southern Africa where it was discovered and introduced fresh containment measures. At home, stocks whose operations are highly sensitive to any changes in restrictions joined in Monday’s sell-off like budget carrier Cebu Pacific, which lost 4.55%.

“Philippine shares plunged to end the month of November as the new COVID-19 variant found in South Africa triggered a global shift away from risk assets,” Luis Limlingan, head of sales at local brokerage Regina Capital, said in a market commentary.

Aniceto Pangan, equity trader at Diversified Securities, agreed with Limlingan. “Though the effects  (of Omicron) remain uncertain, this has created a negative sentiment among investors on the perception of its contagiousness when compared to the Delta,” Pangan explained in a Viber message.

As it stands, the crisis added to an already jittery mood on trading floors caused by surging inflation and central banks starting to roll back their ultra-loose monetary policies to prevent prices from running out of control. But Limlingan said: “Heading into the week, COVID-19 developments are expected to rule the market once again in light of the Omicron variant.”

Elsewhere in the region, Tokyo and Hong Kong flirted with positive territory in the morning but remained in the red, while Shanghai, Sydney, Seoul, Singapore, Taipei, Wellington and Jakarta also retreated.

In the Philippines, foreign investors bought P651.5 million more shares than they sold in the local bourse. A total of 1.99 billion shares, valued at P28.02 billion, were traded on Monday. — with AFP