The PSE index, the 30-company benchmark of the Philippine Stock Exchange ended 2022 in the red to close at 6,566.39, down 7.81 percent from 2021, dragged by rising inflation and interest rates.
Analysts said while the easing mobility restrictions renewed investor optimism and boosted economic activity, this was negated by rising costs of raw materials due to global supply chain problem, higher oil prices and increase in demand as global economies reopened after two years of COVID isolation.
COL Financial head of institutional sales Adrian Yu said despite the local market’s performance in 2022, the PSEi still performed better than global and regional peers.
“Overall, considering the headwinds in 2022, the PSEi fared quite better, especially if you consider how global central banks have raised rates,” Yu said.
Data showed that on the last trading day of 2022, the PSEi ended in flat, declining by 0.15 point amid mixed sentiments as investors assess the outlook for 2023.
Philstocks Financial Inc. assistant research manager Claire Alviar said investors were worried about adverse impact of continued monetary tightening and heightened possibility of the US going into recession.
Luis Limlingan, managing director of Regina Capital and Development Corp., said market sentiments were also affected by easing quarantine rules in China despite resurging new virus cases.
Daily average value turnover reached P7.30 billion this year, down by 18.9 percent from 2021’s P9 billion. The market registered P67.95 billion worth of net foreign selling, compared to P2.75 billion in net foreign selling in 2021.
Total capital raised from primary and secondary shares amounted to P110.29 billion, or 53 percent lower than P234.48 billion raised in the previous year.
Despite the lower capital raised, the PSE had nine initial public offerings in 2022, the most number of IPOs in a single year since 2007. Other capital raising activities this year included one listing by way of introduction, five stock rights offerings and 12 private placements. With AFP
“We still consider 2022 a banner year in terms of the number of IPOs, and we look forward to continuing the listing momentum in 2023. We see the equities market becoming a more attractive option for capital raising given the rise in interest rates and as valuations gradually recover,” said PSE president and chief executive Ramon Monzon.
The PSE saw the listing of three new REITs this year, with two being energy-themed REITs.
“The local REIT market is still teeming with potential opportunities and we expect our REIT roster to expand and potentially diversify to include other themes beyond what we have listed so far,” said Monzon.
The local bourse’s market capitalization registered an 8.4-percent decrease at P16.56 trillion compared to P18.08 trillion in the previous year.
“We are optimistic that the stock market can bounce back next year as the global economy continues to open up and corporate earnings return to pre-pandemic growth levels. While risks from geopolitical tensions, higher inflation and increasing interest rates remain, the Philippines has shown its resiliency through better-than-expected GDP growth during the previous quarter, which we hope will carry over for the 4th quarter and in 2023,” Monzon said.
Asia-Pacific stocks also fell Thursday as the Covid surge in China cast a shadow over markets across the region.
Investors had cheered the easing of China’s strict zero-Covid controls—which had hammered the world’s second-largest economy—but are now worried about the impact of the outbreak on global supply chains and inflation.
The United States, Japan and Italy have imposed restrictions on visitors from China, and a senior US official warned that the surge increases the potential for new Covid variants to emerge.
Hong Kong was down more than one percent by mid-day, and Tokyo closed lower by 0.94 percent. Sydney, Singapore, Shanghai, Taipei and Seoul were also in the red.
Volumes were thin in the final trading week of the year, with investors chewing on the prospects of a recession in 2023, and how central banks—especially the US Federal Reserve—are going to handle the fight against rampaging inflation.
The Fed and others have repeatedly raised interest rates to put the brakes on soaring prices, but higher borrowing costs also slow down economic activity.
“The key trading themes will continue to dominate in early January, most notably how far central banks are willing to push interest rates in order to display their determination to get inflation back to target,” OANDA’s Craig Erlam said in a note on Wednesday.
“Many have already started easing off the brake and we’re seeing plenty of signs of pressures easing, albeit perhaps not as much as policymakers would have liked by now.” With AFP