Shares drop on fears of surge in COVID-19 cases

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SHARES declined on Monday amid fears of another surge in coronavirus disease 2019 (COVID-19) cases in the country and ahead of key economic data releases this week.

The benchmark Philippine Stock Exchange index (PSEi) went down by 58.48 points or 0.86% to close at 6,687.85 on Monday, while the broader all shares index slid by 22.03 points or 0.61% to 3,591.21.

“Philippine shares opened the week on a sour note as investors cashed in from the previous week’s rally. The market took note of the rising COVID-19 cases in some areas in Metro Manila… This could hurt the recovery of the economy already reeling from the impact of higher inflation,” Papa Securities Corp. Equities Strategist Manny P. Cruz said in a Viber message.

The Health department reported 191 new COVID-19 cases in the country for the past week on Sunday, with 55 of these new infections recorded in Metro Manila. Active cases stood at 2,252.

An expert from OCTA Research Group earlier forecasted that the country might experience another surge in coronavirus infections by May or June.

Health authorities last week confirmed the local transmission of a more contagious Omicron subvariant that has become dominant in the United States.

BA.2.12.1 can evade immune protections and is highly transmissible, according to health experts. The Philippines has detected 17 cases of the subvariant, 16 of which were locally acquired while one was a returning Filipino who lives in central Philippines.

Meanwhile, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said investors were cautious ahead of economic data releases this week, such as the US’ durable goods and core personal consumption expenditure (PCE) inflation reports as well as the minutes of the US Federal Reserve’s May meeting.

US durable goods data and the minutes of the Fed’s latest meeting are due for release on Wednesday, while the US PCE inflation report is set to be released on Friday.

The majority of sectoral indices ended in the red on Monday except for mining and oil, which rose by 72.45 points or 0.62% to 11,759.15.

On the other hand, financials declined by 29.39 points or 1.81% to 1,594; industrials gave up by 93.31 points or 0.98% to end at 9,357.86; services dropped by 13.33 points or 0.70% to 1,882.39; holding firms fell by 26.50 points or 0.42% to 6,163.82; and property went down by 12.92 points or 0.42% to 3,056.07.

Decliners outnumbered advancers, 113 versus 72, while 58 names ended unchanged.

Value turnover decreased to P6.64 billion on Monday with 1.22 million shares changing hands from the P7.16 billion with 2.92 billion issues seen on Friday.

Net foreign selling was at P305.97 million on Monday, a reversal of the P357.55 million in net buying seen the previous trading day. — L.M.J.C. Jocson