Local stocks surge on reform hopes

Investors loaded up on stocks of big local companies Tuesday after an orderly conduct of the mid-term elections, bringing the main index beyond the 7,300-mark for the first time.

The main-share Philippine Stock Exchange gained 51.08 points or 0.7 percent to close at a new all-time high of 7,313.46, led by banking and gaming stocks. A new intra-day high was likewise hit at 7,349.95.

PSE chair Jose Pardo quipped: “7,500 here we come. New highs can be expected after a credible and honest election.”

This marked the PSEi’s 30th record breakout for the year and the 91st under the Aquino administration.

“The market rallied on the back of the relatively smooth elections and good first-quarter earnings results so far. Top three banks Metrobank, BPI and BDO contributed half of the day’s PSEi gain,” said Gonzalo Ordoñez, president of First Metro Securities.

Metrobank, BDO and BPI respectively surged by 3.42 percent, 2 percent and 1.46 percent. The top three banks recently reported record-high first quarter results, with strong trading gains adding to net interest earnings.

Gaming stocks Bloomberry (+2.79 percent) and Belle (+2.76 percent) were likewise among the top index gainers.

Joseph Roxas, president of local stockbrokerage Eagle Equities, said this was due to discussions toward a “win-win” compromise on gaming taxes. He said hopes for a favorable resolution on gaming taxes alongside the reaffirmation of support for candidates under the Team PNoy banner boosted the market.

Biz Buzz reported on Monday that the gaming industry was seeing the “light at the end of the tunnel” on the gaming taxation issue.

Meanwhile, a big win for administration candidates, particularly in the Senate, is seen as crucial for the government to pursue the reforms that have boosted investor confidence during the last three years.

Total value turnover at the market yesterday stood at P10 billion.

Despite the overall index gain, there were just as many decliners as advancers (81) while 50 stocks were unchanged as investors focused on large-cap stocks.

Index heavyweight PLDT (+2.62 percent) also contributed to the day’s gains alongside Ayala Land Inc., Ayala Corp., SM Investments, Megaworld and URC.

Outside the index stocks, LTG, GT Capital, TransAsia and Cosco also gained in heavy volume.

On the other hand, the companies whose stocks fell in heavy volume were MPIC, Security Bank, Semirara and ICTSI.