PHILIPPINE SHARES dropped on Monday over fears of tighter lockdown restrictions amid a spike in coronavirus disease 2019 (COVID-19) infections and as some investors prepared for an upcoming initial public offering (IPO).
The Philippine Stock Exchange index (PSEi) dropped by 124.45 points or 1.8% to close at 6,756.92 on Monday, while the broader all shares index fell by 79.14 points or 1.9% to 4,079.40.
“[Investors’] fear of a second wave that might result [in] another lockdown. That’s why some are taking profits and turning their investment into cash to avoid the risk,” UPCC Securities Corp. Equities Trader Aristotle D. Reyes, Jr. said in a text message.
“Another reason might be the incoming initial public offering (IPO). Some investors are selling their positions to fund their IPO subscription,” Mr. Reyes added.
DDMP REIT, Inc., the real estate investment trust of DoubleDragon Properties Corp., on Friday priced its initial public offering at P2.25 per share, the high end of its indicative pricing.
The company has applied for the listing of some 17.83 billion common shares on the main board of the PSE. With the IPO priced at P2.25 per share, DDMPR is poised to raise P14.71 billion.
The offer period will run from March 10 to 16. DDMPR shares are tentatively scheduled to debut on the exchange on March 23.
“Selling pressure was minimal at the beginning of the trading session as investors were trying to get a feel of the sentiment. No one wanted to be the first to unload shares as the recent spike in new cases may be temporary and the market may still recover,” AAA Southeast Equities, Inc. Research Head Christopher John J. Mangun said in an e-mail. “However, selling pressure kept picking up, drawing more and more investors into the sell-off.”
All sectoral indices closed in the red on Monday. Financials fell by 48.65 points or 3.29% to 1,428.97; mining and oil declined by 271.27 points or 3.06% to finish at 8,583.19; property decreased by 89.94 points or 2.58% to 3,389.87; industrials went down by 145.48 points or 1.65% to 8,641.20; holding firms dropped 91.04 points or 1.29% to 6,968.19; and services inched down by 7.23 points or 0.49% to finish at 1,457.40.
Value turnover rose to P9.85 billion with 7.20 billion shares switching hands on Monday from the P7.73 billion seen on Friday.
Decliners overwhelmed advancers, 201 against 38, while 29 names closed unchanged.
Net foreign selling went down to P497.84 million on Monday from the P595.70 million recorded on Friday.
Mr. Mangun said he expects the PSEi to finish between 6,600 to 6,700 in the coming days as investors watch out for how the government will respond to the rising number of COVID-19 cases.
“The government has announced its strategy of restricting mobility in certain cities that are experiencing a surge rather than the entire metro to soften the blow on the economy. Failure to maintain a grip on the situation will certainly spell disaster for the stock market,” he said. — Keren Concepcion G. Valmonte