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Economy

Stocks drop further ahead of GDP data release

By Revin Mikhael D. Ochave, Reporter

SHARES closed lower on Wednesday as investors await the release of the country’s gross domestic product (GDP) data and on rising coronavirus disease 2019 (COVID-19) cases nationwide.

The 30-member Philippine Stock Exchange index (PSEi) declined further, dropping 113.55 points or 1.62% to close at 6,863.61 yesterday, while the broader all shares index fell 37.64 points or 0.9% to end at 4,131.32.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile phone message that the market ended lower as investors remained on the sidelines ahead of the release of data on the country’s economic performance last year.

“We expect slower decline in the fourth quarter on the back of improving manufacturing purchasing managers’ index, unemployment rate, and an uptick in vehicle sales,” Mr. Limlingan said.

“On the external front, goods exported recovered in November, while imports fell relatively to the third quarter likely leading to a higher net export contribution than the previous quarter,” he added.

The Philippine Statistics Authority (PSA) is set to release preliminary GDP data for the fourth quarter and full-year 2020 today.

A BusinessWorld poll of 18 economists and an institution last week yielded a median estimate of a 8.5% GDP contraction for the fourth quarter and a 9.5% slump for the full year.

AAA Southeast Equities, Inc. Research Head Christopher John Mangun said the market ended lower as market sentiment continued to deteriorate amid rising COVID-19 cases in the country.

“The daily case rate has begun picking up since last week, and is approaching 2,000 new cases per day, last seen back in October. Although the rate of new serious cases continues to decline, more and more investors are unloading positions, in preparation of the worst case scenario,” Mr. Mangun said in an e-mail.

The Department of Health on Wednesday reported 2,245 new COVID-19 cases, which brought the tally to 518,407.

Most sectoral indices declined on Wednesday, with mining and oil being the only gainer, rising 49.46 points or 0.56% to finish at 8,767.83.

Property declined 87.28 points or 2.45% to 3,475.1; financials retreated 28.15 points or 1.94% to 1,416.36; industrials shrank 160.24 points or 1.76% to 8,919.3; holding firms went down 67.66 points or 0.95% to 7,017.97; and services lost 5.76 points or 0.38% to 1,510.54.

Value turnover on Wednesday reached P10.68 billion with 98.96 billion issues switching hands, lower than the P11.56 billion with 74.53 billion issues recorded during the previous trading day.

Advancers bested decliners, 112 against 101, while 50 names ended unchanged.

Net foreign selling climbed to P1.37 billion on Wednesday from the P504.07 million seen on Tuesday.

“We may see the PSEi continue lower towards its next major support level at 6,740,” AAA Southeast Equities’ Mr. Mangun said.

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