The Philippine Stock Exchange Index (PSEi) dropped 487.97 points or 6.7 percent on Monday to 6,791.01, the steepest one-day decline since June 13, 2013 when the index dropped by 6.75 percent.
The massive drop wiped out a total of P764 billion worth of market capitalization, following a huge sell off that was triggered by concerns about Chinese yuan devaluation.
PSEi’s 487.97 point decline was also the sharpest single-day decline in terms of nominal numbers.
In a press briefing, PSE president Hans Sicat said the developments in the Philippines is consistent with the pressures felt across global markets, and not just the equities market but across all asset classes, fixed income and currencies.
Sicat stressed that the macroeconomic fundamental of the country remains strong even compared to other countries in the region and that hopefully the release of the second quarter GDP figures this week could support the overall view that the country is poised to sustain its rapid growth.
He also noted that despite the market’s steep decline, it is still not quite near the levels we saw during the 2008 global financial crisis when the index decline by 12.27 percent.
The stock market has now pulled back by around 17 percent from the all-time high closing of 8,136.97. With the current numbers, Sicat said it is too early to say whether the local stock market will fall into the bear market.
Sicat expects the market’s volatility to continue to be quite high over the short term period but the market’s decline could also provide opportunities for investors to buy at very reasonable prices.
After several weeks of foreign selling, foreigners have now turned net sellers year-to-date at P297.90 million.
Total trading value reached 13.03 billion.