Bargain-hunting expected to drive market this week

Some bargain-hunting may drive the stock market this week but trading is likely to be limited ahead of the long Christmas break, dealers said.

Christmas Eve on Wednesday will be the last trading day of the year.

“Many issues have attractive valuations. There could be bargain-hunting but there are still a lot concerns about the US economy,” said George Ching of Citiseconline.

“It will pretty much depend on how things will develop in the United States,” Ching said.

“Locally, I don’t think there will be much trading with just a few more days before the end of the year,” Ching remarked.

It will be the last trading week, so we expect some window dressing in certain stocks, basically the index issues,” said Jasper Jimenez of BDO Securities Corp.

A decision on the US auto industry bailout could also affect the market next week, he added.

For the week, to Dec. 19, the Philippine composite index rose 0.5 percent or 9.79 points to 1,903.53.

In the previous week, the index gained 0.25 percent.

Average daily turnover reached 655.2 million shares worth P1.822 billion compared to 884.2 million shares worth P1.817 billion in the previous week.

“The market may continue to be flat next week with chances of a last minute rally as the year draws to a close AB Capital Securities’ Arlysa E. Narciso said over the weekend.

“As economies suffer from a meltdown, lay-offs, and low industry and market activity, the demand for oil continued to wane to unprecedented levels. In a meeting last week, OPEC decided to cut its production output to a total of 2.2 million barrels per day. Yet, this did not manage to support prices as anemic demand and high US inventories offset the production cut,” Narciso said.

After central banks around the world cut their rates, Philippines finally followed suit and reduced its lending rates by 50 basis points, the first rate cut since January this year.

After signs of easing in food and oil prices, the Bangko Sentral ng Pilipinas (BSP) decided last Thursday to slash rates in an effort to boost growth. The BSP expects inflation to come at around 5.5 percent next year and 5.25 percent in 2010.

Growth next year is seen to hover between 3.7 percent to 4.7 percent.