What's the market outlook amidst Coronavirus (COVID-19) outbreak?

Coronaviruses (CoV) are a large family of viruses that cause illness ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS-CoV) and Severe Acute Respiratory Syndrome (SARS-CoV). The 2019 Novel Coronavirus (COVID-19) is a new strain that has not been previously identified in humans, but is also zoonotic, meaning they are transmitted between animals and people.

The World Health Organization (WHO) has now recognized the infectious outbreak as pandemic.

Statistics as of March 13, 2020.
Sources: www.doh.gov.ph, Coronavirus COVID-19 Global Cases by the Center for Systems Science and Engineering (CSSE) at the John Hopkins University. CSSE at the John Hopkins University.

How are the economies reacting to the COVID-19 outbreak?

Global equities markets responded negatively to the situation, with the S&P 500 (US), Eurostoxx 50 (EU), and KOSPI (Korea) going down by 18.6%, 19.1%, 23.1% respectively, as of March 12. The Philippine Stock Exchange index has dropped by as much as 25%.

Travel restrictions have been imposed by many countries. These would adversely impact many economies especially those dependent on hospitality and tourism like the Philippines.

The COVID-19 impact has caused delays in global supply chains while production in China slows down. There is also an increasing risk in other production hubs as the pandemic spreads.

HOWEVER...

It is important to note that different governments are considering and implementing different precautionary measures to help reduce the economic disruptions caused by the COVID-19 outbreak.

What would be the implications on the capital markets?

Equity markets will continue to be very volatile in the near term given the uncertainty surrounding impact on global supply chain. Dampened business confidence and corporate earnings will affect timing of recovery.
Markets are expecting interest rates to be cut significantly.

What should I do?

Don't panic! Think long-term.
Hold on to your investments as markets generally recover and continue to grow. Events like epidemics, financial crises, and the like, can be overcome as time passes by.

Please revisit your objective at the time of availing the unit-linked policy, which we believe is a medium-to long-term commitment.

For Single-pay Unit-linked policyholders

Hang on tight and stay on the course. The current market condition is deemed to be temporary and will most likely recover.

For Regular-pay Unit-linked policyholders

Market downturn may become an investment opportunity. You can purchase more units with your regular premiums.

Putting monetary investments aside, always remember that health is an investment too!

It is important to be informed and be updated with the developments in COVID- 19 cases at all times. If you or anyone you know experience the following, and have been in close contact with a person known to have COVID-19, or if you live in, or have recently been in an area with ongoing spread of COVID-19, seek medical advice.

Fever
Dry cough
Shortness of breath

For more information, you may call the Department of Health (DOH) hotline at (02) 8-651-7800 loc 1149-1150, or visit their official website and Social Media pages at:

www.doh.gov.ph
www.facebook.com/OfficialDOHGov/
www.twitter.com/doh_Philippines/