Stocks drop as virus continues to cloud outlook

PHILIPPINE shares declined on Monday as investors remained cautious over the country’s economic outlook as the coronavirus pandemic continues to affect recovery prospects.

The Philippine Stock Exchange index (PSEi) declined by 1.59 points or 0.02% to close at 6,369.28 on Monday, while the all shares index inched down by 0.03 point to end at 3.923.

“The inability to sustain gains reflects investors’ low confidence towards the market, as they remain worrisome over our pandemic situation and economic outlook,” Meanwhile, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“Trading became even more anemic… [this] shows that many investors are staying away from the local market due to the lingering uncertainties,” Mr. Tantiangco added.

Value turnover dropped to P4.39 billion on Monday with P3.03 billion shares switching hands, from the P8.62 billion with 6.77 billion issues seen on Friday.

“The uncertainty on the pace of the economy’s recovery is keeping the sentiment subdued,” AAA Southeast Equities, Inc. Research Head Christopher John J. Mangun said in an e-mail.

“The country’s manufacturing output contracted for the month of April, ending a [three]-month streak of growth, according to the monthly survey conducted by IHS Markit,” he noted. “It had almost no effect on the market as it was expected and already factored in, due to the tightening of quarantine restrictions last month.”

Factory activity in the country declined again last month, snapping a three-month climb, as the extended lockdown in Metro Manila and nearby provinces affected production and demand, a survey by IHS Markit showed.

The Philippine Manufacturing Purchasing Managers’ Index (PMI) went down to 49 in April from 52.2 in March “to signal a marginal contraction in operating conditions across the Filipino manufacturing sector.”

Last month’s PMI went below the 50-neutral mark that separates deterioration from expansion, marking the first slump after three consecutive months of growth or since December’s 49.2.

Sectoral indices were split on Monday. Industrials fell by 46.51 points or 0.53% to end at 8,632.84; services went down by 1.83 points or 0.12% to 1,441.28; and property lost 3.29 points or 0.1% to finish at 3,074.65.

Meanwhile, mining and oil gained 31.30 points or 0.32% to close at 9,675.59; holding firms improved by 21.11 points or 0.32% to end at 6,462.42; and financials went up by 3.53 points or 0.25% to 1,397.76.

Decliners outnumbered advancers, 111 against 83, while 56 names closed unchanged.

Net foreign selling increased to P429.45 billion on Monday from the P307.2 million in net outflows seen the previous trading day.

“Investors will remain in limbo until we see clearer signs of a resumption in the economy’s recovery,” AAA Southeast Equities’ Mr. Mangun said. — K.C.G. Valmonte