Metro Manila (CNN Philippines, March 13) — Local stocks dove even lower on Friday morning, testing the 5,100 level to trigger another trading halt hours after President Rodrigo Duterte placed Metro Manila under a month-long community quarantine.
The benchmark Philippine Stock Exchange index managed to climb by 1 percent to end the week at 5,793.94, its best showing in two days. This followed a huge slide on Thursday, which saw the stock market end 9.71 percent lower to 5,736.27 – the lowest since December 18, 2012 – which also wiped out ₱933.35 billion in market value in a day.
More investors dumped shares on Friday morning after Duterte’s late-night address, which bans travel to and from the capital region for a month starting March 15. The selloff was drastic that the PSE had to trigger another 15-minute circuit breaker just minutes after trading opened, with local stocks dipping 10.43 percent lower to 5,138.04.
Shares eventually rebounded until the afternoon session, paring losses as the closing bell rang.
GSIS and SSS invest member contributions in the stock market to generate returns for pension and benefit payments.
All indices bled during the morning session but recovered later in the day. Stocks in banks, services, and holding firms rose, while shares in the mining and oil segment, as well as property and industrial sectors, posted declines.
An analyst said the PSEi’s initial big-time slide mirrored movements as the Dow Jones in the United States fell by more than 2,000 points in reaction to their interventions for the coronavirus outbreak, coupled with negative sentiment towards the Philippine government’s decision to ban travel to and from Metro Manila to combat the virus.
“I think what somehow remains wanting is more clarity as to how it will be implemented. It’s still quite rather vague from the standpoint of the people,” Jun Calaycay, head of research at Philstocks Financial, Inc. “We can’t make out what’s going to happen yet, how they will implement these measures.”
Cabinet Secretary Karlo Nograles and Trade Secretary Ramon Lopez clarified that exemptions will be given for the travel restrictions, which will apply to workers reporting for Metro Manila-based companies. Shipments of food and goods will also proceed as usual, they said in a Friday briefing.
Calaycay added that the confusion contributed to fear, as the decision to limit movement to and from Metro Manila “magnifies the impact of COVID-19 on the broad economy.”
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On Friday, the Securities and Exchange Commission required all listed companies to disclose how the coronavirus pandemic will impact their business operations, as well as the steps they have taken to soften the blow. These reports are due by noon of March 16, Monday.
Some traders said Finance Secretary Carlos Dominguez III’s white knight move helped boost sentiment. The Cabinet official, who is currently on self-quarantine for coming in contact with a COVID-19 patient last week, said he has given orders for state pension firms Government Service Insurance System and the Social Security System to “at least double” their daily purchase volumes of stocks in order to take advantage of the low share prices and provide “support” to the PSE.
“During a period of heightened uncertainty, it’s safer for you to hold cash and then wait for the situation to somewhat settle down,” he added, adding that it’s natural for investors to choose to stay out of the market for now.
“We could have probably seen the worst already, but if there are more unexpected things, like if cases are still rapidly rising, that’s another story,” Calaycay added.
Meanwhile, the peso weakened on Friday at ₱51.03 against the US dollar, compared to Thursday’s ₱50.85:$1 finish.
