ANY OPTIMISM over the Philippines’ credit rating upgrade on Monday by Fitch Ratings evaporated yesterday, as investors awaiting Congress’ ratification of tax reforms made the Philippine Stock Exchange index (PSEi) end three days of gains.
“The local market traded on a softer note a day before a series of huge events in the next few days,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said, citing impending ratification of the first of up to five tax reform packages designed to boost infrastructure spending till 2022, when President Rodrigo R. Duterte ends his six-year term.
The bicameral conference committee harmonizing divergent tax reform provisions of the Senate and the House of Representatives was unable to issue its report yesterday for ratification by both chambers.
Diversified Securities, Inc. equity trader Aniceto K. Pangan said “the market is still awaiting the final version of the tax reform package,” whose divergent provisions have spelled significant difference in terms of projected additional revenues.
“Investors have been discounting this news, but until this is final then it is not yet set,” Mr. Limlingan noted, while Mr. Pangan said that “[u]ntil we are certain of the final version, definitely market will continue to consolidate.”
Set to be ratified separately is the proposed P3.767-trillion national budget for 2018.
Both laws are targeted for implementation starting Jan. 1 next year.
Congress is also expected to extend for a year martial law declared over Mindanao — in the face of what Malacañang sees as persistent threat from Islamic militants and communist rebels — that is set to lift at end-2017.
Lawmakers then adjourn on Dec. 16 for a month-long break.
Four of the six sectoral indices ended with losses: mining and oil by 149.57 points or 1.28% to 11,559.25, holding firms by 87.99 points or 1.04% to 8,412.21, services by 13.60 points or 0.86% to 1,569.89 and industrial by 15.08 points or 0.14% to 11,017.
On the other hand, property gained 18.31 points or 0.47% to finish 3,915.43, while financials added nine points or 0.42% to close 2,152.90.
Negative sentiment similarly gripped many other Asian bourses, with Japan’s Nikkei 225, Hong Kong’s Hang Seng Index, China’s blue-chip CSI 300, the Shanghai Composite Index, South Korea’s KOSPI Index, Straits Times Index and the Jakarta Composite Index dropping 0.32%, 0.63%, 1.31%, 1.24%, 0.42%, 0.16% and 0.09%, respectively.
Philippine stocks that declined led those that gained 115 to 87, while 52 others were unchanged.
Tuesday’s list of the 20 most-traded stocks showed only seven gained, led by Ayala Land, Inc. that added 1.49% to end P44.15 apiece, Bank of the Philippine Islands that increased by 0.96% to P105, Security Bank Corp. that rose by 0.72% to P252 and Metropolitan Bank & Trust Co. that climbed 0.87% to P98.95 each.
Those that lost were led by Bloomberry Resorts Corp.; DMCI Holdings, Inc.; International Container Terminal Services, Inc.; and Ayala Corp. whose shares gave up 3.55% to close P10.32 apiece; 3.27% to P14.22; 2.008% to P102.50 and 1.44% to finish P1,025 each.
Tuesday saw 638.34 million stocks worth P6.61 billion change hands, compared to Monday’s 923.34 million stocks worth P5.85 billion.
Foreigners remained predominantly sellers for the eighth straight trading day, but Tuesdays’ mere P491,402.68 net sales were the smallest amount in that period. — Arra B. Francia