When it comes to Philippine stocks, 2020 so far isn’t looking better than 2019.
Barely two weeks into the new year, and the market is the worst performer among major Asian peers, with overseas fund withdrawals reminiscent of January 2008. Back then, fears of a US recession roiled global shares and pummeled Manila into a bear market.
Last year, Philippine equities were already among the region’s laggards.
Expectations of a weaker peso and fears of regulatory risk over a contract dispute between the government and Manila’s water utilities could be holding back investors from scooping up Philippine equities, even amid the prospects of faster economic growth, according to Rachelle Cruz, an analyst at AP Securities Inc.
An added factor is the uncertainty over the passage of measures cutting corporate taxes and incentives, she said.
After clocking a 4.7% gain in 2019 (the regional benchmark surged 16%), Philippine Stock Exchange Index has retreated 0.5% this year as overseas funds have pulled $44 million, one of the biggest outflow in Asia.
The Philippine stock exchange suspended trading on Monday after the government said there’s an imminent threat of a hazardous eruption of the Taal Volcano, now rumbling and spewing ash and smoke just 65 kilometres (40 miles) south of the capital Manila.