MANILA - As testament to the Filipino penchant for laughter and humor in times of crisis, stock market traders managed to crack a few jokes despite the bearish mood in the stock market this year to dispel an expected tougher year in 2009.
"Merry Christmas and a Happy New (Record) Low Year,” said Eagle Equities Inc. president Joseph Roxas, referring to the spate of record low stock prices this year.
"People are just looking forward to the long Christmas break. At least, the market won't fall (during those days)," Accord Capital Equities Corp trader Justino Calaycay said in jest.
Edison Bacani, a full-time small investor and stock market agent, sends clients and friends the hottest showbiz news through mobile phone text messages along with his reports on the stock indices in the different markets in the region.
"Naubos na expectations . Huwag na daw ako mag text ng mga bailout news na kasama sa market data ko kaya showbiz na lang. Mas interesting pa. (There are no more expectations. They say I should stop texting bailout news with my market data, that I just send showbiz news. It’s more interesting)," Bacani said.
Most analysts witnessed the Asian financial crisis which gripped the region in July 1997 that started with the collapse of the Thai baht and almost plunged Asia into an economic meltdown.
Many of these analysts describe 2008 with some anxiety. "This is the worst market I've ever seen after the sharp declines in a short period of time. I thought I've seen it all," ING Investment Management Philippines chief investment officer Paul Joseph Garcia said.
"It's a year I want to forget. It's the worst I've seen. I have not experienced the Great Depression but I have experienced the Asian Financial Crisis in 1997 and I think this is much worse, " AB Capital Securities research head Jose Vistan said.
As of December 24, the last day of trading in 2008, the Philippine Stock Exchange index (PSEi) or the 30-company blue chip index of the stock market slumped 48.29 percent to 1,872.85.
Market capitalization, or the total value of the shares of stock of companies listed on the stock exchange, also shaved off 49 percent or a total of P3.9 trillion to P4.069 trillion as of December 24 from P7.978 trillion as of Dec. 28, 2007, PSE data showed.
Foreign investors were also net sellers for 2008 with net foreign selling at P47.85 billion.
Total foreign buying reached P335.318 billion while total foreign selling was P383.167 billion.
Average daily value turnover shrunk to P3.1 billion a day, from P5.48 billion in 2007.
Among the negative factors that affected investor confidence in 2008 was the spike in prices of goods due to spiraling oil prices.
Inflation reached a 17-year record high to 12.5 percent year-on-year in August before easing to 11.9 percent in September as oil prices came down from more than $100 per barrel.
The demise of several financial giants in the United States, including Lehman Brothers and AIG, led to steep drops in the US Dow Jones Industrial Average as the threat of a global recession loomed.
On Oct.27, stocks plummeted 12.27 percent, the biggest single-day drop in 18 years, as risk-averse investors dumped emerging-market equities and sought refuge in safer instruments.
For the first time in the Philippine Stock Exchange (PSE) history, trading was halted for 15 minutes, testing the exchange's "circuit breaker rule" which automatically suspends trading of shares once the PSEi drops 10 percent.
ING Investment's Garcia said that it was not a remote possibility for a "bear market rally" to happen in 2009 after the severe decline in stock prices in 2008.
A bear market rally is an increase in stock prices during a bear market trend.
"We think investors may look at stocks with strong cash flows amid the economic slowdown," said Garcia.
Analysts are optimistic about a recovery in the second half of next year as uncertainties in global markets clear up.
Intra Invest Securities market strategist Eric Claudio said he was bullish on infrastructure-related stocks because governments are trying to boost spending with infrastructure programs to create jobs.
"Next year is a wait-and-see. We'll likely see the market hit 2,150 to 2,200 by the end of next year," Claudio said.
"Economic fundamentals haven't bottomed but share prices may have bottomed. People are expecting a bad year in 2009 but it may not be as bad as 2008,” Vistan said.
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