By Arra B. Francia
REKINDLED investor confidence over the strength of the Philippine economy, especially in the wake of the just-enacted tax reform, propelled the Philippine Stock Exchange index (PSEi) yesterday to notch its 13th record-high finish for the year.
The 30-member bellwether index closed 8,535.09, 44.18 points or 0.52% higher than Wednesday and beating its previous record of 8,523.07 logged on November 6.
The market managed to record an intraday high of 8,571.46, though it was still lower than the 8,605.15 the PSEi logged last November 3.
PSEi was now 24.8% higher year to date.
“(PSEi’s fresh peak was due to) confidence in the Philippine economy supported by a smart new tax regime, continuous inflow of investors, not only for stocks and bonds, but also for real estate, continuous investment in BPOs (business process outsourcing) and hotels, which are a form of dollar revenues for the Philippines,” First Metro Securities Brokerage Corp. Market Education Consultant Alexander N.N. Gilles said in a telephone interview.
“Tapos na ‘yung Marawi problem (has been resolved),” he added, referring to the five-month battle government forces waged to retake the central Mindanao city from Islamic State-inspired militants starting May 23.
President Rodrigo R. Duterte signed into law last Dec. 19 the first of up to five planned tax reform packages designed to help finance the government’s P8.44-trillion “Build, Build, Build” infrastructure development program until 2022, when Mr. Duterte ends his six-year term.
Thursday also saw foreign investors remaining predominantly buyers for a fourth straight trading day. Yesterday’s session was marked by P1.245 billion in net foreign buying, the second-biggest amount in that period after the P1.856 billion recorded last Dec. 21 — two days after tax reform enactment.
“Kahit na may (Even if there is a) political problem, political concerns, the economy still grows. So ‘yun ang hinahanap ng (that is what) foreign investor(s watch out for: that) na baka naman this political problem might harm economic development,” Mr. Gilles said.
“Pero hindi pala (It turns out that is not the case). So Duterte’s bad mouth doesn’t have repercussions. Life goes on and the economy continues to grow.”
IB Gimenez Securities, Inc. Head of Research Joylin F. Telagen meanwhile attributed the gains to investors repositioning their stocks ahead of the year’s last trading day. “I think this was due to investors repositioning of stocks ahead of year-end window dressing,” Ms. Telagen said.
While the index closed at an all-time high, RCBC Securities, Inc. equity analyst Jeffrey Lucero said that window-dressing may not be enough to push the market to pierce 8,600 on the last trading day of 2017.
All sectoral indices were up, save for the holding firms sectoral index that dipped 0.16% to 8,606.49. The financials as well as mining and oil sub-indices led yesterday’s gains, jumping 1.29% to 2,202.75 and 1.1% to 11,510.51, respectively.
Analysts are projecting that the index could rally beyond the 9,000 mark by end-2018, fueled by continued strong economic fundamentals as well as the steady earnings growth of listed companies.