PH shares plunge due to rising Delta cases, uncertainties over Duterte's pandemic response

Metro Manila (CNN Philippines, July 26) — Philippine stocks bled on Monday as the presence of the highly contagious Delta coronavirus variant in the country scared off investors, coupled with uncertainties on President Rodrigo Duterte's final address, analysts said.

The bellwether Philippine Stock Exchange index (PSEi) plunged by 148.13 points or 2.27% on Monday to finish at 6,372.61.

The wider all shares also ended in the red, falling by 1.82% to close at 3,965.15.

All sectors also declined with the holding firms suffering the most.

The increasing number of Delta variant cases in the country dampened the market's performance amid worries over potential harder restrictions, Philstocks Financial Inc. senior research analyst Japhet Tantiangco said in a mobile message.

"This raises the risk of a resurgence in COVID-19 cases, and a reimposition of strict quarantine measures, which may delay our economic recovery," Tantiangco said.

READ: Concepcion: Putting Metro Manila under ECQ to 'destroy' economy

Christopher San Pedro, an equity analyst at Unicapital Securities, shared the same sentiment, stressing this was an attempt of investors to reduce exposure to risk given the Delta threat.

"Risk off behavior remains dominant as the threat of the COVID-19 delta variant continues to spook investors and traders given the lack of short-term fundamental catalysts to trigger bargain hunting," San Pedro said in a mobile message.

The Department of Health late last week confirmed the local transmission of the Delta variant first identified in India. It is believed to be 60% more contagious than the Alpha variant and can cause severe symptoms.

Delta cases in the country now stand at 119, the DOH said Sunday.

Following DOH's confirmation of local transmission, the pandemic response task force decided to put Metro Manila and four provinces under general community quarantine with "heightened restrictions," forcing more businesses to limit their operations.

For the rest of July, the government also imposed the strictest lockdown on Iloilo province and cities Iloilo and Cagayan de Oro.

Analysts said investors stayed on the sidelines as they wait for President Rodrigo Duterte's final address, expecting that concrete plans on combatting the coronavirus pandemic would not be skipped.

"Investors sold out of the market as investors await the final SONA to be addressed by the President Duterte later... Most expect the president to discuss how he will shepherd the country out of the pandemic," Luis Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message.

"At this point, investors are looking to the President's speech later for cues on how to navigate the volatile market," Anna Corenne Agravio, an equity analyst at Regina Capital Development Corporation, said in a separate market comment.

The DOH on Monday reported that the Philippines logged 6,664 new infections, pushing the total COVID-19 case count to 1,555,396.