What if the market didn't open?

It was business as usual at the stock market last Wednesday. But would it have been any different had trading been suspended?

Not necessarily, as most stock analysts think so, since technically the market has been moving in a downward channel during the past two weeks. "Barring any trend reversal, a lot expect the index (Phisix) to fall in the 1,600 level within the next few days," said Gonzalo Bongolan, head of research of PCCI Securities Brokers Corp.

"The damage has been done. It's damned if you do, damned if you don't." All Asia Capital research director Helen Alvarez said.

Despite a hanging suspension order by the Securities and Exchange Commission, the 30-share Phisix managed to pare down its losses by just under three percent upon resumption of trading, calming fears that the suspension would trigger a bloodbath at the bourse.

For the first time since the inception of the country's stock exchange, the SEC has ordered a freeze in trading transactions as the investigation on gaming stock BW Resources reached crisis proportions with the mass resignation of the PSE personnel responsible for the report.

Only the timely intercession of economic managers led by Finance Secretary Jose Pardo prevented the market from going into a standstill.

Veteran stockbroker Irving Ackerman, who heads his own brokerage I. Ackerman & Co., noted that external factors were basically the main cause of concern among investors as major markets like that in the US (Dow Jones) are likewise in a skid.

Bongolan pointed out that expectations of rising US and domestic interest rates continue to put pressure on the market, which Ackerman estimates account for about 80 percent of market sentiment.

Only about 20 percent of market jitters could still be linked to the BW fiasco, Ackerman added, since this issue has been bugging the market for over two weeks now.

An analyst from a local brokerage firm catering mainly to retail or individual investors said even the so-called mass market -- as differentiated from the big or institutional investors -- have already factored in the BW mess in their investment decisions and were now more concerned with the direction of the economy in general.

"They worry about the negative effects of the conflicting policies, the lack of positive directions or any clear-cut program of the Estrada administration. It's confusing them," he said.

The stock experts, however, cautioned that the effects of the suspension of trading would have been more pronounced in terms of the country's image in the international market.

"If trading was to be suspended, that would just feed fuel into the fire, we wouldn't want that," Bongolan said, adding that there is already too much confusion at the PSE, which in itself has been causing harm.

He added that the PSE, despite the crippling of its Compliance and Surveillance Group, still has a lot of internal procedures in place to protect everybody. "Nobody can just have his or her own way."

"It's not as if we went back to the Stone Age. But for the longest time, the Exchange had a working relationship with the SEC. "Its SRO (self-regulatory organization) status is young, so its just like going back to the old set-up," Bongolan said.

For his part, Ackerman said: "I think this order bordered on economic sabotage. It's not good to close the exchange... we're not going to look good. People on the outside will think something is wrong."

He said foreigners, for instance, have been on a selling spree over the past four months as they move their portfolio toward more attractive markets. On Wednesday, foreign net selling went up to P464 million, more than double the average of between P100-200 million, although he did not consider this as alarming enough.