PSEi crashes to 8-year low; circuit breaker’ triggered over COVID-19 fears

Bloodbath continued during the resumption of trading on the Philippine Stock Exchange Thursday, with the main index plummeting to its lowest in more than eight years, as fears over the worldwide economic impact of the coronavirus disease 2019 (COVID-19) pandemic triggered massive selling of stocks.

“Share plummeted as investors are worried about the economic damages from the pandemic,” Regina Capital Development head of sales Luis Limlingan said.

As of 10 a.m., the bellwether PSEi shed 1,182.56 points or 22.17% to 4,152.81.

The bellwether closed at 4,623.42, down 711.95 points or 13.34%. This is the lowest for the local stock barometer since it closed at 4,642.76 on January 17, 2012.

“Sentiments are still dominated by fears of the COVID-19 spread and its socioeconomic impact. Overseas, we’re already seeing recession warning,” Philstocks Financial senior equity analyst Japhet Tantiangco said.

The heavy selling prompted the local bourse to implement a so-called “circuit breaker,” in which it halted trading at the market’s opening at 9:30 a.m. for 15 minutes.

Trading halted as PSEi drops 12.4%. Trading will resume at 9:45 a.m. pic.twitter.com/fdmXHrZDZ1

— Phil. Stock Exchange (@PhStockExchange) March 19, 2020

“For the first time, the local market triggers its circuit breaker by the opening bell,” Tantiangco said.

The Philippine Stock Exchange suspended trading for two days in response to the government’s order to implement an enhanced community quarantine in the entire Luzon.

Trading resumed Thursday, March 19, after the Inter-Agency Task Force exempted financial markets “after they assured the authorities that necessary safeguards to ensure the safety of their employees and the community they interact with are in place.”

The PSE, however, observed shortened trading hours with the market closing at 1 p.m. from its usual close at 3:30 p.m.

“The two-day trading suspension has also somehow dented confidence since it disappoints investors who want to maintain the liquidity of their financial assets,” Tantiangco said.

Foreign funds bought P3.180 billion shares and sold P3.922 billion for a net selling position of P741.716 million.

More than 1.253  billion shares valued at P9.420 billion, changed hands. Decliners led advancers, 211 to 8, and 21 issues were unchanged. --KBK, GMA News