Foreign buying helps fuel 3rd day of gains for PSEi

By Arra B. Francia, Reporter
THE Philippine Stock Exchange index (PSEi) surged past 7,600 on Thursday on sustained foreign buying and as investors continued to digest President Rodrigo R. Duterte’s State of the Nation Address (SONA) on Monday, particularly on his push for legislative approval of the remaining tax reform packages.
The main index jumped 2.02% or 151.85 points to finish at 7,665.85, its highest in more than a month, while the broader all-shares index likewise climbed 1.54% or 69.99 points to 4,605.52.
“This has been expected technically because we have been oversold before the SONA. So now that the SONA is over, everything is coming into the picture and investors are watching what will happen. That’s why the market continued to rally,” Summit Securities, Inc. President Harry G. Liu said in a telephone interview.
Mr. Liu said investors will especially be watching progress of legislative action on the remaining three to four tax reform packages after Senate leaders signaled on Tuesday and Wednesday that even just the second package — which seeks to slash corporate tax rates and remove redundant fiscal incentives — will be difficult to approve within the year before midterm election fever sets in starting January 2019.
Mr. Liu said investors are also looking forward to more second-quarter earnings results, which will determine listed firms’ plans for the remaining half of 2018.
“We think that investors may already be positioning ahead of the 2Q earnings season and the release of 2Q GDP and an anticipated BSP rate hike on Aug. 8,” RCBC Securities, Inc. said in a daily note, adding that “[f]oreigners may have also been encouraged by the peso’s relative stability since mid-June.”
Regina Capital Development Corp. Managing Director Luis A. Limlingan, meanwhile, said PSEi rode partly on optimism on Wall Street following news of easing trade tensions between the United States and European Union.
Locally, five sectoral indices ended with gains: holding firms by 2.68% or 197.47 points to 7,547.92, property by 1.89% or 69.92 points to 3,757.32, industrials by 1.61% or 170.73 points to 10,774.96, financials by 1.02% or 19.17 points to 1,893.84 and services by 0.79% or 11.63 points to 1,484.06.
Mining and oil was the lone sub-index that declined — by 0.64% or 63.71 points to 9,822.11.
Some 697 million issues switched hands, valued at P6.66 billion, slightly lower than the previous session’s P6.90 billion.
Advancers trumped decliners, 125 to 79, while 42 were flat.
Foreign investors were predominantly buyers for a second straight day, with net inflows growing nearly threefold to P644.67 million from P246.30 million on Wednesday.
Thursday’s 20 most active stocks showed 16 that gained, including SM Investments Corp. (up 3.86% to P969 apiece), BDO Unibank, Inc. (1.85% to P137.50), and Aboitiz Equity Ventures, Inc. (5.27% to P54.95 each).