PSEi lost 20.6% in H1, but now on rebound

Published July 2, 2020, 10:00 PM

by James A. Loyola

The Philippine Stock Exchange index (PSEi) dropped 20.6 percent in the first half of the year, closing at 6,207.72 on June 30.

The PSE noted though that, quarter-on-quarter, the benchmark rose by 16.7 percent.  It has also rebounded by 34.3 percent from its lowest closing level for the year of 4,623.42.

“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” PSE President and CEO Ramon S. Monzon said.

All sectoral indices were also down during the first half. The Services sector decreased by 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 Php6.59 billion at the end of the first half, lower by 15.9 percent from the Php7.84 billion average turnover in the same period last year.

Foreign funds were net sellers at Php68.44 billion, a reversal from the Php21.26 billion net foreign buying registered at the end of June 2019.

“Foreign funds have left emerging markets including the Philippines as a result of the health and economic crisis caused by COVID-19.  Even if there are attractive bargains in emerging markets, foreign

institutional funds prefer to sit it out,” Monzon explained.

He note that, “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 53.0 percent and 58.9 percent of value turnover.”

Capital raised from the January to June period was P20.83 billion. 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. Hopefully, these two new listings will help prop up trading activity even as we await the listing of the first REIT IPO,” Monzon said.