Philippine Stocks Enter Bear Market Amid Global Concerns and Disappointing Economic Data
Philippine stocks have plunged for the fifth consecutive day, pushing the benchmark index into a bear market. Concerns over potential global headwinds and underwhelming domestic economic data have fueled the decline.
The Philippine Stock Exchange Index (PSEi) dropped 4% to 5,862.59 on Friday, more than 20% below its October 2022 peak and the lowest closing level since October 2022. The selloff saw high trading volumes, with 138.8 million shares exchanged, marking the highest daily turnover in four months.
The economic factors driving the market downturn include:
* US-China trade tensions: President Donald Trump's threats of higher tariffs on Chinese goods have dampened investor optimism in global equities.
* Domestic economic slowdown: A government report released on Thursday revealed slower-than-expected economic growth in the fourth quarter of 2022, due to sluggish investment, consumption, and farm output.
* Earnings uncertainty: Investors are awaiting the release of fourth-quarter and full-year company earnings reports.
Analysts attribute the prolonged market weakness to the absence of positive catalysts. Rastine Mackie Mercado of Chinabank Securities in Manila highlights this lack of positive momentum.
Among the hardest-hit companies on Friday were conglomerates San Miguel Corp. and Alliance Global Group Inc., which both dropped 20% to their lowest closing levels in several years.
Claire Alviar of Philstocks Financial in Manila emphasizes that the weaker-than-expected economic growth and uncertainties surrounding President Trump's policies are weighing heavily on market sentiment.
The PSEi's slide into bear market territory highlights the challenges facing Philippine stocks amid global economic uncertainty and domestic headwinds.