Philippine stocks veterans see more pain after record plunge

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MANILA: Philippine stocks investors, crushed by the steepest plunge on record, should brace for more pain, according to the country’s seasoned market watchers.

While the Philippine Stock Exchange Index could stage a technical bounce from Thursday’s record 13% loss after a controversial two-day trading halt, it will be a short-lived reprieve.

The virus-fueled global equity sell-off pushed the Philippine stock index down through Thursday by almost 41% since the end of 2019, its worst start to a year, based on data going back to 1987. Its valuation, once among Asia’s highest, has tumbled to about 9 times earnings forecast for the next year, the cheapest in the region after benchmark indexes in Hong Kong, South Korea and Sri Lanka.

A U.S.-listed exchange-traded fund that tracks Philippine shares rose 2.7% on Thursday. The ETF plunged by a record 19% on Monday after the bourse announced it was shutting. With no signs that the viral outbreak has peaked, the Philippine stock index may exceed its 56% peak-to-trough slump during the 2008 global financial crisis, according to Manny Cruz, a strategist at Papa Securities Corp. A dip below 4,000 -- the gauge closed at 4,623.42 Thursday -- is"within the realms of possibility given the fear out there, ” he said.

 

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