Stock market decline steepest since 'Black Monday'
MANILA, Philippines – The Philippine Stock Exchange Index (PSEi) on Monday, January 11 fell sharply, closing at 6,288.26, down 287.17 points or 4.37% .
The decline was the steepest since the August 24, 2015 "Black Monday," when the Philippine stock market plunged 6.7% or 487.97 points down, wiping out the year's record gains as worries over the impact of China's slowing economy sparked a fresh rout in Asian stocks.(READ: Philippine stocks plunge 6.7% amid global equities rout)
Monday's finish was also the lowest for PSEi since February 18, 2014, when the index fell to 6,193.97.
China's stock market also resumed its volatile plunges also Monday, January 11, as worries over the slowing economy and the government's ability to manage it sent traders fleeing, dealers said.
The Shanghai Composite Index plunged 5.33%, or 169.71 points, to 3,016.70 on turnover of 286.4 billion yuan ($43.6 billion).
The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped even more, tumbling 6.60%, or 130.62 points, to 1,848.10 on turnover of 377.8 billion yuan. In Hong Kong, the benchmark Hang Seng Index slipped 2.8%, or 565.21 points, to close at 19,888.50. (READ: China stocks resume plunge on economic gloom)
PSE President and CEO Hans B. Sicat said in a statement Monday that the negative developments overseas continue to affect the performance of global equities, including the Philippine market.
"Money managers, including foreign funds, are assessing and rebalancing their exposure to emerging markets following the sell-off," he said.
He added the situation though does not change what is happening in the real economy, with the growth drivers seemingly intact, citing the strong business process outsourcing performance, robust consumer sector, lower inflation, and growth in infrastructure.
The investors are also advised by Germo to manage their expectations as the market is still on a downtrend with no signs yet that it is about to reverse. But even if the PSEi has dropped over the past few months, it still is relatively expensive, he added.
"In spite of it going down and is still expensive, the country’s growth prospects still remain intact and good," Germo wrote. (READ: Downtrend for PH stocks in 2016)
"We hope that the resilience and sound fundamentals of the local economy will be apparent in the medium term and can help temper the volatility over the coming periods,” Sicat said. – Rappler.com