Stock market ends 2009 with 63% gain

THE stock market rebounded from a global financial slowdown to end the year up 63 percent, making it one of the best-performing equities markets in Asia and positioning it for further growth in 2010.

“Almost everyone is expecting a better 2010,” said Astro del Castillo, managing director at First Grade Holdings Inc.

“Companies are already announcing possible investments, capital expenditures, possible mergers and acquisitions, backdoor listings and initial public offerings because of the positive outlook for next year.”

The Philippine Stock Exchange Index closed at 3,052.38 against the previous year’s close of 1,872.85.

The index hit its highest closing level this year on Dec. 2, when it finished at 3,111.96.

“The level it achieved this year was quite remarkable despite economic weakness,” AB Capital Securities said.

“What we can look out for next year are those sectors with high growth levels and stocks with the highest potential to benefit from an economic turn.”

AB Capital expects the market to test the 3,100 level next year.

Del Castillo said the election-related spending next year was likely to benefit consumer-related stocks such as power, telecommunications and food.

Markets will be closed starting today, when dealers go on an extended holiday break. Trading will resume on Jan. 4.

By next year, analysts said, investors would be closely watching the minutes of the Federal Reserve meeting set on Jan. 6, as well as key US economic indicators such as employment and retail spending data.

On the local front, the market would pay attention to policy rates, expected to remain steady until February, and the “political risk premium” of the May elections.

Over the long term, First Metro Investments Corp. said, the prospects for earnings and growth would likely continue to pick up in 2010 because of restructuring and cost-cutting measures carried out in 2009.

First Metro also expects the struggle for control of Manila Electric Co. between San Miguel Corp., led by Eduardo Cojuangco Jr., and Metro Pacific Investments Corp., led by Manuel V. Pangilinan, to continue and expand to other areas.

“The tussle over Meralco control between MVP and Cojuangco seems far from over, and it is extending to other firms and projects such as Philex and utilities,” First Metro said.

It said both parties had enough cash to finance future acquisitions.

Among the top gainers for this year were Atok Big Wedge, which closed at P101 a share from only P1.60 in 2008; Philex Mining Corp., which closed at P16 from only P4.90 last year; Aboitiz Power Corp., which ended at P8.60 from P3.80 in 2008; Megaworld Corp., which ended at P1.48 from P0.66 a share last year; and Meralco, which closed at P205 from P59.50. –Jenniffer B. Austria, Manila Standard Today