Stocks rise as market prices in tax reform effect

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By Arra B. Francia, Reporter

SHARES jumped on Wednesday as investors priced up shares of companies set to be affected by the government’s tax reform program.

Stocks rise as market prices in tax reform effectThe 30-member Philippine Stock Exchange index (PSEi) added 0.31% or 25.55 points at the close of Wednesday’s trading to finish at 8,359.61. The broader all-shares index also increased 0.32% or 15.36 points to 4,881.98 yesterday.

“The market ended positive today after JGS (JG Summit Holdings, Inc.), URC (Universal Robina Corp.), GTCAP (GT Capital Holdings, Inc.) and TEL (PLDT, Inc.) contributed 43.61 points to the index. The news about the tax on sugar (from P10 to P6) buoyed investors’ sentiment on URC and lifted JGS stock price as well,” Timson Securities, Inc. Equity trader Jervin S. de Celis said in a text message on Wednesday.

The bicameral conference committee on Tuesday finalized merging the versions of the Senate and House of Representatives for the Tax Reform for Acceleration and Inclusion bill. The version is now awaiting ratification from both chambers of Congress before being turned over to the president for signing.

Among the changes investors cheered was the levy of P6 per liter for beverages using caloric and non-caloric sweeteners, which was previously proposed to be at P10 and the simpler tax scheme for automobiles.

Mr. De Celis also noted that George SK Ty-led GT Capital surged “after the bicameral committee adopted a four-tier tax scheme for cars.”

Regina Capital Development Corp. Managing Director Luis A. Limlingan meanwhile cited a slim value turnover on Wednesday, which stood at P6.3 billion after a total of 1.14 billion issues switched hands.

“The PSEi is still riddled with a psychological resistance on its way back up, with the 8,379.64-level looking to be its next ceiling. Breach that level, and the PSEi is faced yet again by another hurdle at 8,433.48,” Mr. Limlingan said.

The local bourse tracked the positive performances of international markets, as the Dow Jones Industrial Average bagged its third straight record high to 24,504.80, 0.49% or 118.77 points higher than the previous trading day.

All sectoral counters ended in positive territory, save for the property sub-index which closed 0.28% or 10.87 points to 3,904.56.

The mining and oil sector led Wednesday’s climb at 1.4% or 161.82 points to 11,721.07, followed by services that ended 1.04% higher or 16.29 points to 1,586.18. Industrials edged up 0.78% or 86.30 points to 11,103.30; financials posted a 0.27% uptick or 5.79 points to 2,158.69; and holding firms were higher by 0.11% or 9.48 points to 8,421.69.

Advancers narrowly beat decliners, 97 to 96, while 43 stocks remained unchanged. Foreigners turned sellers for the ninth consecutive day, selling P419.27 million on Wednesday, lower than Tuesday’s P491.40 million.