Surge of stocks seen

Amidst uncertainty
By JAMES A. LOYOLA
http://www.mb.com.ph/

The local stock market is expected to see a surge of optimism in the first month of the new year, given the 63 percent growth it posted in 2009 despite the backdrop of uncertainty as the economy tries to recover from the global crisis.

“Firms that have reported decent, if not handsome, bottomlines for the first nine months will be prime candidates at trades open on January 4, 2010,” said Accord Securities analyst Justino Calaycay Jr.

He noted that money may initially flow in towards blue chip and second-line counters. Yet, as shown in 2009, despite the backdrop of uncertainly, speculative stocks will also get their fair share of the flow.

The Philippine Stock Exchange enjoyed another banner year in 2009 after the market, as tracked by the PSE index (PSEi), recorded a 63 percent annual growth.

This is the highest annual index growth since 1994 when the PSE first operated as a merged entity following the unification of the Manila Stock Exchange (MSE) and Makati Stock Exchange (MKSE) and when the stock market was subsequently tracked by only one main index.

“We began 2009 with a cloud of uncertainty following a global financial crisis that unfolded in late 2007 to 2008. As the year ends, we see a strong recovery in the market which we are hopeful will spill over in 2010 and beyond,” PSE president Francis Lim said.

The PSEi, advanced in 2009 by 1,179.83 points to end at 3,052.68 as of December 29, 2009.

Lim said: “2010 will be the year where we will start reaping the fruits of our efforts under the LEVEL UP strategic agenda like the full implementation of the Personal Equity and Retirement Account (PERA) law, the Real Estate Investment Trust (REIT) Act, the new trading system and the securities borrowing and lending program that will enable short selling in the stock market.”

The LEVEL UP strategic agenda, which was launched in 2008, stood for the following: List more companies and securities; Expand and educate the investor base; Value and enforce corporate governance standards; Enhance shareholder value; Launch new products and services; Upgrade market infrastructure and human resources; and Partner with government and other stakeholders.

“The market’s resilience was a reflection of the collective resiliency of our listed companies, the economy and the humble efforts of the Exchange to rise amidst one of the biggest financial storms in history,” Lim said.

Value turnover for 2009 almost broke the one trillion peso level, a feat only achieved once before in the history of the stock market.

As of the end of trading in 2009, total value turnover amounted to P994.16 billion, 30.1 percent higher than the P763.90 billion registered in 2008. Daily value turnover averaged P4.11 billion or 32.3 percent higher than P3.11 billion average in 2008.

The combined market capitalization of listed domestic issues in the PSE at yearend appreciated by 48.2 percent to P6.03 trillion compared with P4.07 trillion in 2008. Read more...