Little action seen as investors go on vacation

With barely a week to wrap up stock market trading this year, all bets seem to have clustered around the inevitability of the local bourse ending up far worse than last year and maybe the last compared with its Asian neighbors, too.

Wary of the uncertainty of the impeachment trial against President Estrada, both local and foreign investors have stayed away from the market for the past three weeks as evidenced by the low volume turnover, except for a few instances involving huge cross sales in selected blue chips.

James Lago, research head of Wellex Global Equities, said with the way the main index has behaved over the past weeks, "we’ll end up definitely lower than last year even with some window-dressing and mark-to-market transactions expected until year-end."

He said based on trend analysis, the Phisix is seen to drift within a tight range of a 1,414 support level (lower limit) and 1,488 technical resistance (upper limit).

Last Friday, the Phisix stood at 1,429.17, almost flat from the previous day’s close. In 1999, it ended at 2,142.97 and moved sideways at the start of 2000 at 2,141.77. By the time the BW trading scandal, the Mindanao hostage crisis, the bomb scare and the peso depreciation have taken their toll, the index has slumped to a two-year low of 1,251.23 in late October.

He said there has been no sustainable Christmas shopping for bargain hunters since there are a lot of portfolio realignments that have been going on, shifting from one stock to another and from equities market to the safer haven of corporate bonds and government securities.

Wise Securities research head Jose Vistan said investors seemed to have shifted to a "vacation mode" with no compelling reason to return to the market in the meantime, unless something comes up at the impeacthment trial that would be an "important determinant" of how the market players would react.

"Expect these to trigger volatility in the market so our advise to our clients is just to stay defensive and try to let these things pass before testing the waters again," he said.