THIS week, the PSEi fell to 7,200 points, its lowest drop since the latter parts of 2018. A wide variety of factors contributed to this plunge, many of which have haunted the Philippines and the market since the start of 2020.
Technical analyst and stock broker Hernan Segovia cited the swine flu, the Taal volcano eruption, President Rodrigo Duterte’s ongoing conflict with water concessioners and now the 2019 novel coronavirus (2019-nCoV) as examples of catalysts that pressed the country’s stocks downward.
Stocks such as SM Prime, BDO and Gokongwei stocks (e.g. JG Summit, Universal Robina and Cebu Pacific) have helped sustained the PSEi in previous weeks, but after news on the 2019-nCoV, that’s when the PSEi fell from around 7,600 points to 7,200 points at the end January. This sudden drop in equities is similar to the state of other markets all over the world, as investors shift their investments in response to the global pandemic.
“The coronavirus thing is another kind of threat,” Segovia said. “And a lot of market participants have liquidated their positions. Everything is bleak in the sense that they have seen the reaction of other countries as well. ”
Segovia, however, said that despite all the bad news, the Philippine economy remains strong, citing the strength of the peso relative to the dollar as well as falling oil and commodity prices, both can help the countries domestic consumption.
“Sayang ang saka sang peso. If you notice, it’s below 51 already. It’s a good catalyst sana because ang price sang commodities already down. Sayang lang. Ang focus is not on those things but on the bad news,” Segovia said./PN
