MANILA, 2 December — The Philippine market continued to recover the past week and managed to edge up despite the fact that it had a shortened trading week with Friday, Nov. 30, being a national holiday.
The composite index was higher by 3.67 percent by the end of the week, having gained 40 points before closing at 1,128.47 points. Volume turnover again rose half a percent as 4.37 billion shares were traded. However, value turnover decreased 12.97 percent to P2.31 billion ($44.85 million).
Market analysts were actually not surprised when the market edged down on Monday. "It [the index] has been up for three days... players who bought in last week on heavy volumes are trying to liquidate now... they are taking profits," Eagle Equities president Joey Roxas said.
This quickly changed and on Tuesday, just as Efren Cruz, president of Mutual Fund Management Co. of the Philippines, predicted, the market continued its run-up to Christmas.
"There have been several positive developments... including the aid pledges from the United States, the capture of Nur Misuari and the favorable resolution of the Afghanistan situation... there may be a slight further correction but then we should begin base-building [consolidating], setting ourselves up for a nice Christmas rally," Cruz said earlier.
"People are still keen on the package of [United States] aid obtained by President Arroyo... with T-bill rates falling there is some shift of funds [into equities] and with some stocks sold down very heavily there are technical, valuation reasons to buy in to the market," DA Market Securities Chairman Nestor Aguila said.
"People are now looking forward to some form of recovery in the United States economy by the middle of next year and are expecting it to trickle through here... they are more positive on prospects for next year," United Coconut Planters Bank Trust fund manager Vanessa Lim said.
The market almost totally ignored the fact that government troops and Muslim gunmen loyal to rebellious governor Nur Misuari battled on the outskirts of the city of Zamboanga, leaving at least 28 people dead.
"Its a non-factor because they [investors] think that its temporary and going forward, should not be much of a concern given the government has shown its serious in dealing with the issue," ING Investment Management chief investment officer Paul Garcia said.
Of course prices eased on this news but Aguila said the market had largely become immune to outbreaks of violence in the south and with the United States pledging increased military support, it was more confident that the government could contain trouble.
Until the end of the week, traders noted a positive reaction to the fruits of President Gloria Macapagal-Arroyo’s trip to the United States and the positive response from President George Bush.
"Volume has been building up in the market which is a good sign and locals have been coming back in to bargain hunt," DBS Vickers Securities associate director for sales, Enrique Santa Ana said.
The market improved some more by the end of the trading week when the Philippine government released third quarter GDP (gross domestic product) figures which showed a 2.9% increase year-on-year, slightly above the consensus market estimate for growth of 2.8%.
