One would run out of superlatives to describe 2020 and what it brought to local stock market, the Philippines and to the world.
The year started with a bang, literally, with the explosion of the Taal Volcano which was soon followed by the COVID-19 pandemic that unhinged everyone and had an unprecedented impact on the global and local economies.
The unexpected spread of the disease and its rapid development into a pandemic triggered panic selling in global markets and the Philippine Stock Exchange index suffered its steepest plunge ever, falling 48.8 percent to a low of 4,039.15 from its peak of 7,891.99 reach earlier in the year.
“This year is truly unprecedented for the stock market with the circuit breaker triggered three times and with the PSEi recording its steepest intraday drop in PSE history,” said PSE President and CEO Ramon S. Monzon.
Despite marking the worse drop in the history of the local bourse, local investors had picked up the slack as foreign funds beat a hasty exit and had propped up the market and helped the index recover a bit by picking up bargains.
The PSE also showed its steady hand and Monzon noted that, “Our trading system was up 100 percent during the enhanced community quarantine period when we had to close the trading floor.”
Despite the challenging times making investors more wary, the PSE was able to mark several milestones.
“It is tempting to write off 2020 but we cannot disregard the achievements accomplished this year. We had the listing of the first Real Estate Investment Trust after more than a decade-long wait. Even with the pandemic, we had a decent capital raising pipeline, including the listing of the biggest IPO ever in the history of PSE,” Monzon said.
During the height of the pandemic, only three firms were brave enough to launch their initial public offerings to raise a total of P44.16 billion. All three firms were engaged in businesses that were seen to be resilient or had even thrived as a result of changes in the behavior of consumers
First to go was MerryMart Consumer Corporation, a small grocery store chain with big expansion plans, which listed at the PSE’s Small and Medium Enterprises board in June 15 after its initial public offering worth P1.59 billion.
This was followed in August by AREIT Inc., the first Philippine real estate investment trust, which raised P13.57 billion as investors favored it because its leasing revenues remained stable and secure during the pandemic.
AREIT offered 456.88 million common shares (Firm Offer) at a price of P27.00 per share. The IPO consisted of 47.86 million primary common shares and 409.02 million existing common shares offered by the Sponsor, Ayala Land, with an over-allotment option of up to 45.69 million shares.
The last IPO of the year was also the biggest in the PSE’s history. Converge Information and Communications Technology Solutions Inc. raised P29 billion as the broadband internet business was saw a surge in demand as more people were forced to work and study from home during the lockdown.
It offered a total of 1.5 billion primary and secondary common shares with an overallotment option of 225.8 million shares at P16.80 per share.
Once a surge in COVID-19 cases started to plateau, government eased quarantine restrictions and this injected some optimism into the stock market and allowed share prices to recover some lost ground.
The gradual reopening of the economy plus the success in the development of vaccines spurred the market further for even stronger gains.
However, the main index has yet to return to pre-pandemic levels but it managed to stay above the 7,100 level.
The PSE index closed at 7,139.71, up by 17.46 points or 0.3 percent, on the last trading day of 2020. The PSEi climbed 54.4 percent from its lowest closing level in 2020 of 4,623.42 on March 19. However, the main index is still down by 8.6 percent year-on-year.
The All Shares index also finished lower year-on-year, down by 8.1 percent. Among the sector indices, only Mining and Oil closed in the green, up by 17.8 percent. The Financials sector, on the other hand, was down the most as it shed 22.3 percent year-on-year.
Daily average value turnover slightly improved to P7.35 billion from the P7.29 billion average in 2019. Foreign funds were net sellers by P128.65 billion from P14.26 billion last year.
“As we end the year, let us continue to inspire each other to remain steadfast and to persevere despite the challenges and to do more for the development of the capital market in the coming year,” Monzon said.