By Arra B. Francia
AFTER a two-week hiatus from breaking records, the Philippine Stock Exchange index (PSEi) emerged from an extra two-day break to pierce the 8,500 line to end at the year’s 11th peak, partly on the back of “pent-up demand.”
The PSEi lodged its first finish past 8,500 on Thursday at 8,516.02, 150.76 points or 1.8% more than previous trading day on Oct. 30. The 30-member bellwether index managed to reach an intraday high of 8,543.80 before pulling back by the end of trading hours.
The main index had tested the 8,500 mark in the middle of trading on Oct. 17 and 18 at 8,586.73 and 8,548.58, respectively, before retreating.
The last record-high finish was recorded at 8,497.74 — 2017’s 10th — on Oct. 17.
Yesterday saw the broader all-shares index gain 65.04 points or 1.33% to 4,956.97.
Foreigners ended five straight trading days of net sales, marking yesterday with P758.47-million net buying.
Trading volume surged to 1.472 billion shares worth P9.501 billion from Oct. 30’s 730.790 million shares worth P6.665 billion.
“To me it’s basically the outcome of the trip of the president’s fruitful trip from Japan, which will eventually turn into economic, positive investments to come into the Philippines,” Summit Securities, Inc. President Harry G. Liu said in a telephone interview yesterday, referring to President Rodrigo R. Duterte’s latest visit at the start of this week to the Northeast Asian neighbor that — together with China — has been a key focus of bilateral relations.
Analysts also noted the market’s efforts to make up for lost time during the Oct. 31-Nov. 1 trading break.
“There was huge pent up demand from the two-day holiday,” RCBC Securities, Inc. equity trader Jeffrey Lucero said in a text message.
Investors are also positioning themselves in the face of the pending release of more third-quarter earnings reports.
“Index heavyweights AC (Ayala Corp.) and SM (SM Investments Corp.) drove up the market, possibly on optimism on 3Q results. MEG (Megaworld Corp.) — today’s top gainer — may have rallied on its disclosure about turning over 1,000 residential units in Makati Central Business District alone,” Mr. Lucero said.
Megaworld disclosed on Thursday its planned turnover by yearend of more than 1,000 residential condominium units in the Makati CBD, translating to P9 billion in sales.
“This bodes well for them as it implies that there must have been little delays this year; that’s why they were able to turnover the units,” Mr. Lucero added.
Summit Securities’ Mr. Liu further attributed the market’s rise this year to the positive sentiment brought about by the Duterte administration’s ambitious P8.44-trillion infrastructure build until it steps down in mid-2022 and its tax reform program.
The first of up to five packages of tax reform now awaits plenary approval at the Senate, and enactment by yearend in time for enforcement starting January next year. The entire tax reform is key to financing the infrastructure program.
“Actually for me it’s been very positive throughout the year that the investing public was just waiting for more positive development coming from our president… everything seems to be in place, it’s just a matter of implementation,” Mr. Liu said.
Asked for an outlook, Mr. Liu said the market is moving at a support of 8,300-8,350 without a resistance level.
“So we are moving, hopefully, continuously as it goes up, [hits a] new high, it corrects, until such time we reach what you call a bullish market,” Mr. Liu said.
“But that will be much later — we have to see.”