Philippine Stocks Fall as Traders Weigh Marcos Win, Global Rout

(Bloomberg) — The benchmark Philippine stock index dropped amid a global selloff, as investors awaited economic plans of Ferdinand Marcos Jr. who, based on an unofficial count of Monday’s vote, is headed for a landslide win in the presidential election.

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The Philippine Stock Exchange Index ended 0.6% down at 6,720.93, its lowest close in nine months. It fell as much as 3.1% earlier. Nineteen of the benchmark’s 30 components declined, with Converge Information and Communications Technology Solutions Inc., AC Energy Corp. and Robinsons Land Corp. leading the losses.

Equities are unlikely to rally until Marcos lays out a plan to spur growth, tame inflation and address the nation’s ballooning debt, according to analysts. The slide in the benchmark gauge also reflects losses in regional shares as rising U.S. interest rates and slowing Chinese growth hurt sentiment.

Read: Dictator’s Son Marcos Wins by Landslide in Philippine Vote (2)

“Marcos has to form his economic team right away to provide local market stability,” said Manny Cruz, a strategist at Papa Securities. “Without an economic team and pronouncements on his economic agenda, it will be difficult to see a rally for investors will be reacting mainly to global headwinds.”

Based on the broader Philippine Stock Exchange All Share Index’s loss of up to 2.9%, the selloff on Tuesday erased as much as 488 billion pesos ($9.3 billion). Market capitalization dropped by 168.27 billion pesos at the close.

PhilWeb Corp., an operator of bingo parlors, jumped 31%, leading gains among stocks seen as having ties to Marcos. PhilWeb has gained 80% in five sessions.

Over a longer time line, losses in the nation’s equities pale in comparison to the declines in regional shares. The Philippine Stock Exchange Index has fallen 5.6% this year, outperforming the MSCI AC Asia Pacific Index which dropped more than 17%.

Here’s what analysts are saying:

Manny Cruz (strategist, Papa Securities)

• Investors should take the opportunity to position amid pullbacks as Marcos will have a “super majority” in Congress, allowing him to push through legislation to boost economic growth and attract foreign investments

• In the short to medium term, stocks will track the gains posted in 2016 when Rodrigo Duterte was elected and equities rallied when he named his economic team and presented his economic and fiscal agenda

Robert Ramos (head of the trust and investments group at Rizal Commercial Banking Corp.)

• A key topic is the nation’s debt to GDP, which is “quite high compared with the last six years”

• Marcos and his economic team must also allay foreign investors’ fears by assuring them that contracts and agreements reached here and abroad will be honored

• “Foreign investors would also like to hear assurances that clean and transparent governance will be pursued. If those fears are allayed, they might decide to buy into the Philippines.

• The biggest headwind for the Philippines is that it’s a consumer-driven economy that is not on a high note

Jonathan Ravelas (chief market strategist, BDO Unibank)

• “The surveys have already flagged this outcome” and the market will take this result as credible

• Investors will stay on the sidelines until the new president provides a clear and concrete plan to tackle rising poverty, strengthen health care, deal with inflation and manage debt

Related stories:

• Philippine Stocks Fall as Marcos Wins Big in Presidential Poll

• PhilWeb, Araneta Surge After Marcos Jr.’s Landslide Election Win

• Here’s What Analysts Say Are Priorities for Philippines’ Marcos

• Presidential Elections May Spell Fat Philippine Stock Returns

• Billions at Stake for Marcos Jr. in Vote Over Dictator’s Legacy

• The Philippines Can’t Afford to Go Back to the Past: Editorial

(Updates with closing prices throughout)

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