MARCOS’ VAGUE POST-ELECTION PLANS SINK SHARES

The benchmark Philippine Stock Exchange index (PSEi) closed lower on Tuesday as the stock market resumed trading after the May 9 polls, while companies linked to the family of presumptive president Ferdinand “Bongbong” Marcos Jr. soared higher.

Weak global markets and the lack of clarity on the economic team and plans of Marcos, the son of the late dictator Ferdinand Marcos Sr., to counter rising inflation and shrinking fiscal space contributed to the decline on Tuesday.

The PSEi dropped 0.58 percent, or 38.97 points, to 6,720.93 while the broader allshares index shed 1.02 percent, or 37.08 points, to 3,584.62.

The PSEi, whose members include 30 of the largest and most-actively traded companies, fell as low as 3.14 percent near the opening bell, mirroring declines across the region and Wall Street overnight.

Tuesday’s selldown wiped out nearly P142 billion in market value, data from the PSE showed.

It was accompanied by a surge in volume, with 3.2 billion shares valued at P23.2 billion changing hands. Foreigners were also net sellers amounting to P1.1 billion.

Investors were now waiting for details on the incoming Marcos administration’s plans for the economy.

“The faster they clarify the transition team, and how they are going to address [economic issues], then the less volatility you might have because their policies were more of motherhood statements,” BDO Unibank Inc. chief strategist Jonathan Ravelas told the Inquirer.

“Had it been [Vice President] Leni Robredo, she already provided some of her key platforms,” he added.

ING senior Philippine economist Nicholas Antonio Mapa agreed that little was known about Marcos’ economic platforms.

“Philippine markets may face a sell-off today based on a Bloomberg survey showing that he was the least favored candidate by the investor community,” he said in a note to clients on Tuesday.

“Among other campaign promises, Marcos has vowed to subsidize food and fuel items, which will adversely affect the country’s fiscal sustainability goals. The [Philippine peso] is likely to come under selling pressure today as foreign funds exit,” he added.

There were some clear stock market winners on Tuesday. Companies led by Gregorio Ma. Araneta III, the brother-in-law of the presumptive president, rallied hard during the session.