PSE among least affected stock markets in Asia

The local stock market is among the top three exchanges in Asia that have been least affected by the ongoing global financial turmoil unleashed by a meltdown in the US mortgage market, according to a study conducted by the Philippine Stock Exchange.

The study showed that the slightly affected stock market in the region is that of Korea’s which has fallen 34.56 percent as of Friday last week, followed by the Malaysian Stock Exchange which has shed 35.36 percent. Trailing behind is the PSE which has lost 42.08 percent of its value since the start of the year.

Since closing 2007 at 3,621.60, the PSEi is now down to 2,097.80 due to the continued exit of foreign funds from the stockmarket.

The most heavily-beaten stock market is that of China’s with the Shengzhen composite index suffering the biggest drop of 63.27 percent while the Shanghai composite index fell 61.98 percent.

The VN Index of Vietnam and SET Index of Thailand followed with a decline of 59.11 percent and 47.33 percent, respectively.

Hong Kong’s Hang Seng Index has dived 46.8 percent, Straits Times of Singapore (44.05 percent), and Japan’s TOPIX (43.02 percent).

“This shows our listed companies’ resiliency amidst the financial turmoil that has been hounding stock markets worldwide,” said PSE president and chief executive officer Francis Lim.

Lim attributed the PSE’s resiliency to the country’s good solid economic fundamentals. ”Coming from a record-breaking economic performance in 2007, our country has managed to post respectable growth rate levels which is a testament to the strength of our domestic fundamentals. Although we are not insulated from the present crisis, the broad economic and fiscal reforms that were put in place over the last couple of years are providing significant cushion for us to better weather this financial storm,” Lim said.

“Let us not panic. Let’s keep our faith,” Lim added.

Share prices have been in free fall across the globe amid investor fears about the growing global market impact of the meltdown in the US financial sector.

Investors dumped shares across the globe in scenes reminiscent of the 1987 stock market crash, analysts said.

Since the collapse of the US subprime or higher-risk home loan market last year, banks have been saddled with mountains of bad debt, undercutting their finances and making them unwilling to provide any but the safest loan, including to each other. 

President Arroyo believes that the country is in a better position now to weather the global financial crunch.