Window Dressing to push stock prices up?

Today, December 28, is the last trading day of the Philippine Stock Exchange (PSE). On Monday and Tuesday next week, the markets are closed for New Year celebrations, and the first trading day in 2008 is on Wednesday, January 2.

Is the market set to close higher today because portfolio managers and traders might try to “window dress” their portfolios in time for year-end 2007?

A bit likely. In a previous article, we explained that Window Dressing is a strategy employed by fund managers wherein they try to make their portfolio look as attractive as possible before presenting it to clients or stockholders.

In the days leading up to the end of the quarter or the year, fund managers would purchase recent winners while selling old holdings at a loss, in an attempt to show that they own the best-performing stocks of the period.

A few analysts and traders believe this holds true. In an interview with the Philippine Daily Inquirer, president of PCCI Securities Francisco Liboro said, “The market is now on its final trading week for 2007, and hopes are high that we will see a significant jump in share prices owing to window dressing.”

Still, local investors might choose to stay on the sidelines today as a reaction to yesterday’s slump in the US stock markets following the assassination of Pakistani opposition leader Benazir Bhutto. Fund managers might also decide to sell stocks today to lock in profit after a straight four-day advance of the PSE.

Yesterday I met with a friend who works as an investment manager and, while talking about stocks and investments, joked that he plans to spruce his portfolio up by aggressively buying certain stocks today. Whether that was half-meant, I’ll never get to know.

In any case, I’m all set to unload my holdings if and when stocks surge today. Should that happen, it’s going to be a nice, profitable way to end the year indeed.

What’s your bet, will the Philippine stock market close up or down from yesterday?

About the Author

PSEi support seen at 6,200 and 6,000 amid weaker Peso

In a not-so-surprising move, the U.S. Federal Reserve (Fed) yesterday raised interest rates by 75 basis points (bps) or 0.75% in a bid to tame rising inflation in the United States. This was the third consecutive 0.75% rate hike by the Fed, which brings the federal funds rate, the central bank’s benchmark interest rate, to ... Read more

Official SWIFT Code of BDO, BPI, Metrobank, Philippine banks

When sending cash remittances or wire transfer to a bank account in the Philippines (such as BDO, BPI, Metrobank, Landbank, DBP, etc.), you’ll surely need the SWIFT Code of the bank. Look no further because you can find all the SWIFT Codes you need in this list! Make sure you’re using the right bank code ... Read more

How to Waive your Credit Card Annual Fee (BDO, BPI, Metrobank, RCBC, Citibank, UnionBank)

Without a doubt, one of the most annoying fees that credit cardholders have to pay is the annual fee. Majority of cardholders are familiar with this fee and majority of us likely pay this grudgingly year after year after year. In the case of my credit card with BPI (Bank of the Philippine Islands), I’m ... Read more

Why Filipinos do not become business owners or entrepreneurs

For a majority of Filipinos, entrepreneurship does not seem to be a typical, expected path. This is not surprising, considering that in school, students are primarily taught to become employees after graduation. Students train for years to become staff workers, reporting to a supervisor, and just waiting to receive their wages or salaries every month. ... Read more

My experience investing in Mutual Funds in the Philippines

I started investing in mutual funds when I was 22 years old. As an Overseas Filipino Worker (OFW) then, I was fortunate to be able to save some money at that young age because of my work abroad. One time while I was on vacation in the Philippines, I saw a large billboard in EDSA ... Read more

Income Tax Tables in the Philippines (2022)

The Philippines’ new tax reform bill, known as TRAIN or Tax Reform for Acceleration and Inclusion, was signed into law on December 19, 2017 and its implementation began on January 1, 2018. What are the new income tax rates under the TRAIN law? How will TRAIN affect income taxes of individuals and corporations? How is the ... Read more

PSE Stocks Performance under each Philippine President (1987-2021)

Did you know that Philippine stocks were able to achieve an astounding growth of 800% in a span of 30 years? From 1987 until 2018, the Philippine Stock Exchange index (PSEi) rose from 1,000 points to a peak of 9,000 points — generating a return of 800% over 30 years. (The PSEi is an index ... Read more

SSL 2022: Salary Increases for Teachers, Nurses, Gov’t Employees

Good news to all government employees! There’s a new round of salary increases beginning January 1, 2022! Millions of employees of the Philippine government — including public school teachers, nurses and staff of government hospitals, and workers in local and national government agencies, etc. — will be getting an automatic salary adjustment this 2022 under ... Read more

PSE Trading Hours in 2022: What time open, when closed?

Before you take the plunge into stock trading and investing, make sure you understand what stocks are and how the Philippine Stock Exchange (PSE) operates. Unlike other investments that are relatively safe, stock trading is risky and loss of money is a possibility. So before you deep dive into the exciting world of stock trading, ... Read more

Price Floor and Price Ceiling of PSE Stocks

Trading bands in the PSE come in two forms: Price Ceiling, or the upper price limit, and Price Floor, or the lower price limit.

4 thoughts on “Window Dressing to push stock prices up?”

  1. I wanted to thanks for this excellent learn!! I undoubtedly enjoying just about every little little bit of it I’ve you bookmarked to check out new stuff you publish


Leave a Comment