Stock market collapse?

On Jan. 4, this year, the Philippine Stock Exchange was cited as the Best Stock Exchange in Asia for 2015.   It got the Marquee Award for its corporate governance programs, its rapid shift to a better trading engine, and for hitting its highest ever index, past 8,000 points in April 2015.

The PSE was selected by Alpha Southeast Asia as winner of the Marquee Awards through a survey of issuers and investors in the Southeast Asian region.

The award-giving body noted that, “PSE spent a large part of the year continuously pushing the boundaries and is now striving to encourage world-class standards of disclosure and corporate governance among its listed companies in the Philippines.”

A week later, on Jan. 11, 2016, the Philippine bourse suffered one of the worst stock market slumps in the region.   The index hit 6,288 points, down 9.57 percent in just one week.   The index has hit its lowest in a year and collapsed nearly 23 percent from its 8,136.97 high on April 7, 2015.   The total loss in value in just nine months —P2.93 trillion or $62.3 billion.

One company marvelously defied the downtrend.   San Miguel Corp. was singular with its rising share price, from P49.80 on Dec. 29, 2015 to P52 on Jan. 11, 2016, up 4.4 percent.   Ironically, stock market investors have shunned SMC for much of the past year, without looking at its intrinsic fundamentals.

For nearly all companies, however, their loss in values is massive, deep and broad, cutting a wide swath across-the-board and punishing many companies, from manufacturing, to banking, retail, real estate, and to tourism and gambling.   A number of listed companies saw their prices skidding to their lowest in 52 weeks.

If you invested P100 a week ago, you are now probably losing P10 of every P100 of your money.   If you invested P100 in April 2015, you have lost about a quarter of that by today.

Don’t worry.   You are in good company.   The country’s richest and top billionaires are also hurting.   The tycoons and taipans are losing between 2.1 percent of their net worth, as in the case of banking and automotive taipan George SK Ty of GT Capital, and 23 percent as in the case of port and gambling tycoon Enrique Razon of Bloombery Resorts Corp. and his port monopoly ICTSI.   Razon owns 71 percent of listed casino and hotel company Bloomberry whose market cap is down 23 percent or P11.34 billion, of which P8 billion is Ricky’s loss.   He owns 55.9 percent of  ICTSI which is down 17.5 percent or P25 billion of which P14 billion is his loss.  Thus, in just a week, Ricky has lost P33 billion ($702 million) of net worth.   That is just for one week.  Look back one year and Ricky’s loss in net worth has been astronomical.

Compared to its 52-week high of P13.46 per share in January 2015, Bloomberry’s market value is actually down by a massive 74 percent, from P148.26 billion in January 2015 to P38.66 billion on Jan. 11, a loss of P109.6 billion or $2.33 billion.   Of the $2.33 billion, nearly $1.8 billion belonged to Ricky Razon.

The Philippines’ richest, banking, property, hotel, and retailing tycoon Henry Sy Sr. is 11 percent poorer as the market capitalization of his holding company, SM Investments Corp. dipped 11 percent at P617.9 billion today, down by P75.8 billion ($1.6 billion) from P693.7 billion on Dec. 29, 2015.   Tatang Henry owns 67 percent of SMIC so his share of the loss is $1.05 billion.    Some people will go nuts losing a billion of their net worth in just a week.   Not the Sys.   They just smile all the way to their bank, the biggest, BDO Unibank, which has lost a manageable 9.4 percent of its market value the past week.

The Zobel-Ayalas in Ayala Corp. are also 12 percent poorer with their holding company Ayala Corp. down 12 percent at P412 billion.   The family and siblings of Oscar Lopez in their family holding company Lopez Holdings also lost 12 percent of their wealth in a week.

Andrew Tan of Alliance Global Group, his property, liquor and burger holding company, has shed 9.3 percent of his wealth equivalent to P8.6 billion. His Megaworld property company lost in one week P23.5 billion of its market cap, from P113.48 billion to P137 billion.

Vista Land and Lifescapes of tycoon-statesmen Manny Villar in one week lost 10.8 percent or P7 billion of its market cap.   Manny owns 51.790 percent of the company, so his loss is equivalent to P7 billion, in one week.

Back to PSE’s award.

According to a fund manager quoted by PSE and who is part of the panel of the in-house Marquee Awards at Alpha Southeast Asia, “The performance of the equity market irrefutably underscores how the Philippines’ equity market has been partially insulated from global volatility as it is dominated not only by local investors and a large domestic pension fund system but also foreign investors who now strongly believe in the investment fundamentals of the Philippines. One of many reasons why foreign investors have remained comfortable investing in the Philippines is due to its pro-disclosure stance from the ground up.”

PSE’s Marquee Awards also noted that, “Investors acknowledge the upside for PSE remains high as it has the strongest potential for growth in 2016 given the solid economic fundamentals of the country as the global economic outlook improves and investors return to what is increasingly known as the safest haven in Asia with improving investment prospects for foreign and institutional investors.”

The PSEi closed lower by 3.85 percent in 2015 amidst global market volatilities, but was still the second-best performing index in the Asean.

“As we start another year, we will use this recognition to motivate us to continue to give our best in everything we do,” says PSE president Hans Sicat.  

In 2013, the PSE also received the Best Stock Exchange in Southeast Asia award from Alpha Southeast Asia magazine.

Alpha Southeast Asia is an institutional investment magazine dedicated to covering the Southeast Asian region.

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