The PSE composite index recorded more than a 13% drop in today’s trading day after it announced the resumption of services this week, marking what is likely the biggest one-day drop in its history.
On Monday, the Philippine Stock Exchange (PSE) announced that trading would be suspended until further notice due to the enhanced community quarantine that is expected to be in effect until April 14, 2020.
There will be no trading and clearing and settlement at the PSE/SCCP tomorrow, March 17, 2020, until further notice, due to the enhanced community quarantine implemented in Luzon. pic.twitter.com/V7zUiTMCiR
— Phil. Stock Exchange (@PhStockExchange) March 16, 2020
After PSE chief Ramon Monzon petitioned the inter-governmental agency tasked with evaluating the quarantine for an exemption, the exchange was able to resume its trading on Thursday.
“Basically, the position paper explains why the extended closure of the market will be very bad, not only for the capital market, but for the country in general.”
However, the PSE composite index dropped as low as 1,296 points during the morning session, almost 25% down. It managed to close above 4,000 points, however, it remained 13.34% below the previous day’s close.
Dow Jones influenced today’s drop in the Asia Pacific markets
In addition, the NYSE trading floor will be temporarily closed after confirmation of two employees testing positive for the coronavirus and will move to electronic trading until the virus is contained.
Stacey Cunningham, President of the NYSE, told CNBC:
“We implemented a number of safety precautions over the past couple of weeks, and starting on Monday this week, we started preemptive testing of employees and screening of anyone who came into the building […] we tested people and they were sent home and not given access to the building. A couple of those test cases have come back positive.”
Aside from the Philippines, other markets in the Asia Pacific region have also been affected:
- South Korea has also recorded a drop of 8.39% at the Korean Stock Exchange, recording a new 52-week low.
- Indonesia announced a temporary trading halt after the Jakarta Composite Index fell at 5%.
- Hong Kong’s Hang Seng Index fell 2.61%
- S&P/ASX 200 in Australia closed at 3.44% lower
Big Philippine conglomerates step up to combat COVID-19
Philippine-based conglomerates such as SM Supermalls, San Miguel Corporation, Ayala and MVP group have extended a helping hand in fighting the coronavirus outbreak in the country. Most of these companies have agreed to shoulder the workforce compensation through their emergency response packages.
SM, one of the country’s largest conglomerates, has also agreed to pledge over US$1.9 million [AU$3.3 million] to help medical workers.
In addition, San Miguel Corporation will continue its food operations to make sure that there is enough to feed the public.
Furthermore, San Miguel CEO Ramon Ang has also agreed to produce 70% ethyl alcohol at one of its subsidiaries, Ginebra San Miguel Inc., and distribute the product for free to communities through their local government units.
Market bottom for PSE uncertain, waits for pandemic to tide over
This may be a short-term opportunity for the Philippine stock market, as big conglomerates are doing their best to combat the pandemic and to generate a positive outlook for the economy.
Experts have yet to observe what the market bottom will be for the PSE composite index until the number of coronavirus cases gets controlled or an official vaccine will be released to counter the virus.