Stocks tumbled to the lowest level in almost two years as the benchmark gauge entered a bear market amid a selloff by foreign investors.
The Philippine Stock Exchange Index dropped 287.17 points, or 4.4 percent, to 6,288.26 at the close, the lowest level since Feb. 18, 2014. Losers routed gainers, 182 to 22, with 28 issues unchanged.
The gauge has declined 23 percent from a record 8,127.48 set on April 10, shaving about $61 billion in value from the country’s stocks as of Friday’s close. The slump sent valuations to the lowest level since 2012.
Philippine equities, the worst-performing market in Southeast Asia so far this year, posted the biggest foreign outflow in six weeks last Friday as concern about China’s economic slowdown and slumping oil prices sap demand for developing-nation assets already hurt by higher US interest rates. Overseas investors sold $13.5 million of Philippine equities this year. They withdrew a record $1.19 billion in 2015, becoming net sellers for the first time since 2008.
“It’s Halloween in January—The red flags are all there for investors to realign their portfolios,” Astro del Castillo, managing director at First Grade Holdings Inc., said. “The sentiments are overwhelmingly negative that a bear market is inevitable.”
The Philippine index has fallen 9.6 percent this year. The measure is trading at 15.3 times projected 12-month earnings, the cheapest level since September 2012, and down from 19.7 on April 10. That compares with the MSCI Emerging Markets Index’s multiple of 10.3.
“At the rate things are going, it’s not improbable for the index to even fall below 6,000,’’ said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. and who forecast last week that the gauge could reach a bottom in the first quarter anywhere between 6,000 and 6,400. “What’s positive now is that valuations are becoming attractive and you can now get what you want at the price you want.”
Petron Corp. the biggest refiner, tumbled 9.4 percent, pacing losses among the 30 shares in the benchmark equity gauge. SM Investments Corp., owner of the nation’s largest bank by assets and biggest property developer, fell 4.8 percent, the biggest contributor to the index’s decline.
Travellers International Hotel Group Inc. slid 6.3 percent, leading a slide among casino stocks, after Philippine Amusement & Gaming Corp. said the nation’s gaming revenues this year is forecast to reach P135 billion. Gaming revenue rose 17 percent to about P130 billion pesos last year, Pagcor chairman Cristino Naguiat said. Bloomberg