The local stock barometer yesterday rallied past the 7,800 mark to close at a new high for the year on investors’ optimism on the government’s tax reform program, President Duterte’s upcoming trip to China and the country’s first-quarter economic growth performance.
The main-share Philippine Stock Exchange index (PSEi) racked up 86.24 points or 1.11 percent to close at 7,841.99, outperforming most regional peers on the back of hefty foreign buying. The index tested the 7,900 level in intra-day trade, supported by some P1.47 billion in net foreign buying.
For the four-day trading week, the index gained a total of 180.98 points or 2.4 percent.
Manny Cruz, chief strategist at local stockbrokerage house AsiaSec Equities, said there were several factors that buoyed the local market, including the passage of the Duterte’s tax reform package at the House of Representatives ways and means committee level.
Cruz also cited pronouncements that the House might approve the package by next month and then be elevated to the Senate. This pleased the market as this was “on track with the DOF (Department of Finance)’s plan to pass this before yearend,” Cruz said.
The passage of the tax reform program is crucial to the government’s pledge to usher in a “golden age of infrastructure.”
Another factor that supported the PSEi’s upswing was optimism on President Duterte’s second trip to China. After rekindling bilateral ties with China during his state visit late last year, Cruz said this new visit might bring in more development funding to support massive infrastructure-building.
Anticipation of strong first-quarter domestic economic performance also boosted investor sentiment, Cruz said, noting that the market consensus was a gross domestic product (GDP) growth of 6.7-6.8 percent.
All these three factors combined attracted net foreign buying to the market, Cruz said.