By Arra B. Francia
INVESTOR CONFIDENCE grounded on looming tax reform and end to the Aug. 22-Sept. 19 Chinese “ghost month” propelled the Philippine Stock Exchange index (PSEi) to a new record-high finish on Thursday.
The bellwether index rose 1.13% or 91.03 points to 8,144.91 yesterday, marking its highest finish since April 10, 2015 when it ended at 8,127.48. PSEi also posted an intraday all-time high of 8,169.64, 32.67 points more than the previous intraday record of 8,136.97 on April 7, 2015.
The all-shares index edged up 0.83% or 39.56 points to 4,815.91, while all six sectoral indices ended with gains of 0.15-1.79%.
“The stock market’s surge to a record high underpins investor confidence in the local economy and in the Philippine capital markets. The Philippines remains a favorite among emerging markets as it continues to provide attractive returns,” PSE President and Chief Executive Officer Ramon S. Monzon was quoted as saying in a statement.
Analysts attributed the bourse’s performance yesterday to expectations that Congress will approve before yearend the first of up to five tax reform packages which the administration needs to spend about P8.44 trillion on infrastructure up to 2022 in order to spur economic growth faster.
Wall Street yesterday also hit record highs (story on S2/6), while a number of major Asian markets slipped: Japan’s Nikkei 225 and Topix Index, Hong Kong’s Hang Seng, Shanghai-Shenzhen’s CSI 300, the S&P/ASX 200 and MSCI AC Asia Pacific shed 0.29%, 0.32%, 0.42%, 0.33%, 0.10% and 0.10%, respectively.
“The tax reform program — it has been talked about that soon it will be looked into before the year ends in October. So this may have contributed to the positive attitude of the investing public. The tax reform is important, as long as it’s crafted properly because the government needs that,” Summit Securities, Inc. President Harry G. Liu said in a phone interview.
UPCC Securities Corp. equities trader Aristotle D. Reyes, Jr., while citing tax reforms as well as one of yesterday’s drivers, also noted that “[i]nvestors are speculating that it’s time to buy, because ghost month is almost over… so it’s an opportunity for some investors to take a jump into the equities market.”
Diversified Securities, Inc. equity trader Aniceto K. Pangan said PSEi could be “heading to 8,200” by “the end of the year,” adding that it could even reach 8,400-8,500 should the first tax reform package be enacted.
For Summit Securities’ Mr. Liu: “[d]efinitely now we’re seeking for record high” and “[t]he index will stop when the issues are overly priced…”
“[A]s of now — for me — 10,000 is supposed to be the direction, hopefully within the year or next year,” he said.
“As long as it starts to move above the new high, then the development of the market is towards the 10,000, based on my technical reading.”