THE SECOND TENDER exercise for the Certificate of Entitlement (COE) in February 2010 will begin on February 22 and end on February 24, a week later than the original February 15.

This is because of the Lunar New Year holidays, which will falls on February 14 next year.

The direct knock-on effect of this is the tender exercise for the March round of COEs will also take place on the first and last weeks of the month, versus the first and third weeks.

While one might expect COE prices to be driven up to unnaturally high levels in the period leading up to the Lunar New Year, due to consumers rushing to buy new cars and with the upcoming reduction in COE quotas, a senior spokesman for a major Korean brand here thinks otherwise.

“For the time being, COEs will be quite stable and fluctuating within a $3,000 range, barring major changes to either tax structures or the economy in general.”

Moving past the Lunar New Year holiday period, new car sales typically slow down and consequently COE prices are lower due to lack of demand.

However, the same spokesman added, “I still expect COE prices to remain much the same, even though there’s a three-weekend window. This is because a lot of showrooms will be closed for a prolonged period during the holiday period and buying sentiments are usually not high then. Hence, it will balance out the additional weekend’s demand.”