Market slumps; Metro Pacific up

Stocks tumbled Thursday along with the rest of Asia as analysts warned the volatility that has characterized markets during the coronavirus crisis is likely to continue for some time.

The Philippine Stock Exchange Index sank 114.39 points, or 1.7 percent, to 6,770.38 on a value turnover of P5.9 billion. Losers overwhelmed gainers, 138 to 45, with 38 issues unchanged.

Metropolitan Bank & Trust Co., the the second-biggest lender in terms of assets, fell 5.4 percent to P53, while First Gen Corp. of the Lopez Group slumped 10 percent to P14.80.

Conglomerate Ayala Corp. skidded 4.6 percent to P645.50, but Metro Pacific Investment Corp., which is into toll roads, water and electricity distribution hospitals and infrastructure, rose 5.2 percent to P3.62.

While governments and central banks have unleashed or prepared to roll out stimulus measures, the rapid spread of the disease and rising death toll are putting a strain on economies and stoking concerns of a worldwide recession.

And with no end seemingly in sight—almost 100,000 people in 85 countries have now been infected—investors are fleeing out of risk assets such as stocks and into safe havens including the yen and gold.

“All we know now is that we don’t really understand what’s going to happen next,” Michael Shaoul, head of Marketfield Asset Management, told Bloomberg TV.

“It’s probably four, six, eight weeks before we’re going to have any useful information as to what the trajectory of the virus is and what the actual economic fallout looks like.”

The epidemic has wreaked havoc on international business, tourism, schools and sports events, and the World Health Organization raised concerns about how the outbreak was being handled.

On Friday S&P Global warned that the crisis could wipe $211 billion off Asia-Pacific GDP this year and send growth to just 4.0 percent, its weakest since the financial crisis.

Tokyo ended the day down 2.7   percent, while Shanghai fell 1.2 percent and Hong Kong shed 2.4 percent in late trade.  

Sydney, Seoul, Bangkok and Jakarta all lost more than two percent, while Singapore, Wellington and Taipei were more than one percent down.

Mumbai plunged three percent, with Yes Bank crashing more than 70 percent at one point after the central bank seized control and imposed withdrawal limits as it struggles with a mountain of bad debt.

CMC Markets analyst David Madden said the fact that so many governments around the world were now putting resources into the fight had in itself spooked traders. “At a certain point… intervention increases nervousness,” he wrote in a note.

Observers also suggested the selling was also fired by investors protecting their portfolios ahead of the weekend in case of any more negative headlines, with warnings that monetary policy only had a limited effect as the virus continues to spread.

“Investors are starting to price in worst-case scenarios… and are now accelerating their hedging game plans for the eventuality of the eurozone falling into recession and the US economy stagnating in the first half of the year,” said  AxiCorp’s Stephen Innes.  With AFP