Philippine stock market faces year-to-date losses at 40%

Metro Manila (CNN Philippines, April 24) - The country’s stock market dropped 2.4% to an index level of 5,465, as the pandemic crisis continues to haunt the global economy.

This is equivalent to a 40% year-to-date loss, said the Philippine Stock Exchange.

Globally, 2.7 million people worldwide were infected with the virus, while the Philippines’ number of confirmed cases has reached 7,192.

As President Rodrigo Duterte extended the enhanced community quarantine in the National Capital Region and other parts of Luzon until May 15, most of the businesses will remain closed.

The National Economic and Development Authority said in its recovery plan that the country is expected to have an estimated loss of P767.19 billion, or 3.85% of the gross domestic product because of the crisis.

However, PSE is confident that the market could rebound soon.

“The markets will come back to its previous peak. It’s just a question of how long will it take these bear markets to get back to their peak level that it experienced before,” PSE President Ramon Monzon told CNN Philippines’ The Final Word.

As the pandemic led to temporary closures of some businesses, Monzon said that listed companies are already aware that they will miss their target earnings.

“The investors know that the listed companies would not be hitting the earnings target this year,” he said.

“As far as earnings are concerned, I think the lower earnings are already factored into the price.”

PSE also said that a solution to stop the coronavirus pandemic could somehow trigger the market.

“Something could happen if a vaccine is found, a treatment is found, I think this would trigger an instant rally in the market, even though it will take time to recover and go back to the peak,” said Monzon.