Will Philippine Stocks (PSEi) retest the March 19, 2020 low?
To refresh our memory, the PSEi’s lowest level at 4,039.15 on March 19, 2020, which I called "Black Thursday: Worst day ever for PSEi" after a two-day market lockdown due to WUHAN VIRUS (COVID-19) pandemic.
Today (March 22, 2021), the main index dropped 40.93 points or 0.64 percent to close at 6,395.17 with only the Services counter managing to advance a little. Volume dropped to 2.48 billion shares worth P6.29 billion as losers swept gainers 172 to 53 with 33 steady.
Philippine shares closed lower as investors assessed the impact of added restrictions on selected hot spots in order to contain the spread of the virus. The sentiment from overseas also spilled over as US equities slid down, breaking their two-week win streak after treasury yields jumped.
Investors reacted negatively to the new restrictions as it further limits the productive capacity of our economy. The PSEi continued lower as the health crisis is perceived to be getting worse. The number of new cases on a daily basis, recorded over the last three days, has surpassed the daily rate that we had at the height of the pandemic last year. The general sentiment remains fearful, evident in the rush of selling at the beginning of the trading session today but prices recovered after the initial sell-off as some investors were more willing to come in and buy shares at lower prices as compared to last week. This may be due to the government’s commitment to the targeted lockdowns rather than shutting the economy down as a whole. The panic selling may continue as cases continue to pick up.
Admittedly, stocks could stay depressed until the government successfully controls the number of infections. After all, being cheap is not a good enough reason for stock prices to move higher. However, every crisis creates opportunities and stocks would not trade at such a cheap valuation if there were no problems. Consequently, the market’s prevailing weakness is an opportunity for patient investors to make money over the long term. Just make sure to manage your risk by buying slowly, so that you can average down in case prices go lower, and by using long-term funds, so that you can hold on to your position in case it takes time for the stock market to recover.
DISCLAIMER: I'm not a Certified Financial Planner. Published herein is my personal opinion and should not be construed as a recommendation, an offer, or solicitation for the subscription, purchase or sale of any securities.
Related Topics:
Philippines Stocks plunge as WUHAN Virus (COVID-19) cases worsen
Megaworld Corporation (MEG) FY2019 Financial Results
MAXS FY2019 Financial Results
TECH FY2019 Financial Results
World Stock Market Bloodbath On Oil Crash
What’s The Impact Of A Negative Oil Price?
Please upvote and follow me on ----> https://steemit.com/@php-ph.
Please follow me on Facebook ------> Valencia, Bohol
Please follow me on Twitter ---------> Valencia, Bohol
PHP: Monday, 22nd day of March 2021, Manila, Philippines.