With the second quarter of turbulent 2020 coming to an end, investors are bracing for the full brunt of new coronavirus-related lockdown measures on local corporate earnings.
After the average 25 percent year-on-year contraction in corporate earnings reported by companies comprising the Philippine Stock Exchange index (PSEi) in the first quarter, BPI Securities president Haj Narvaez said an even worse year-on-year decline of 50 percent may be expected in the second quarter given that the enhanced community quarantine had lasted longer than expected.
Narvaez said a potential reversal of US equities—now trading at lofty prices—would also affect local and regional equities.
The PSEi lost 123.23 points or 1.95 percent last week, closing at 6,191.84 by Friday.
Jose Vistan, head of research at AB Capital Securities, said the market was moving to the next phase: “Acceptance that fundamentals will deteriorate and it will take time before we can recoup the losses.” He sees the PSEi finding support between the 5,800 and 6,000 levels, while resistance is at 6,300. —DORIS DUMLAO-ABADILLA INQ