INDONESIAN stocks plunged on Wednesday after it reported a record surge in Covid-19 cases, while the Philippines tumbled on worries that a multi-billion dollar stimulus package might be running into political turmoil.
Last week, most countries in Southeast Asia began re-opening their economies after months-long lockdowns, spurring a risk-on sentiment and helping Philippines stock market post gains of about 10%.
“This (selling) is healthy. Everyone is waiting for the correction. We need a breather,” said Luis Limlingan of Regina Capital, referring to the Philippine market.
Philippines’ main index fell 2% after local media reported that Finance Secretary Carlos Dominguez III deemed a proposed 1.3 tril peso (RM111.4 bil) stimulus package, which has already been passed by the House of Representatives, “unconstitutional.”
Security Bank Corp fell 5.2% and BDO Unibank Inc dropped 4.5% and were among the top percentage losers on the index.
Indonesia’s benchmark index fell 2.3%, with financials accounting for around a third of the losses. PT Bank Mandiri (Persero) Tbk shed about 7% and was the biggest drag.
The country said daily coronavirus cases breached 1,000 for the first time on Tuesday and it recorded its biggest daily increase in infections for a second successive day on Wednesday.
“There are some concerns that Indonesia could face a second wave in the number of cases, but also global markets saw some correction overnight, which Indonesian markets track, ” said Andry E. Taneli, a portfolio manager at Ciptadana Asset Management in Jakarta.
In a bright spot, Thai shares rose 0.7% on plans to re-open more businesses from as early as June 15 as the coronavirus outbreak appeared to be contained. – June 10, 2020, Reuters
