PSEi firms up as investors digest tax reform

The local stock barometer firmed up on Wednesday as investors digested the local tax reform legislation while regional markets traded with mixed sentiment ahead of the US Federal Reserve policy statement.

The main-share Philippine Stock Exchange index added 25.55 points or 0.31 percent to close at 8,359.61 as investors factored in the first phase of tax reform package that the Philippines will legislate.

The services and mining/oil counters led the PSEi higher with their over 1-percent gain while the financial, industrial and holding firm counters slightly increased.

Only the interest rate-sensitive property counter slipped (-0.28 percent).

“Philippine markets closed in the green but under light value turnover as a series of regional central bank meeting are set to take place, including our own BSP (Bangko Sentral ng Pilipinas) on Thursday,” said Luis Gerardo Limlingan, managing director at Regina Capital Development.

“All eyes are on the Federal Reserve, which kicked off its two-day policy meeting in Washington amid a backdrop of robust global growth and tepid inflation, a mix that has helped boost markets around the world to a series of record highs,” he said.

Limlingan said the PSEi was still grappling with a psychological resistance on its way back up, noting that the 8,379.64-level appearing to be its next ceiling. “Breach that level and the PSEi is faced yet again by another hurdle at 8,433.48,” he said.

Value turnover for the day amounted to P6.3 billion.

There were 97 advancers that edged out 96 decliners while 43 stocks were unchanged.

URC and parent firm JG Summit gained 4.17 percent and 5.15 percent, respectively, as investors were relieved over the tax on sweetened beverages that is shaping up in Congress.

The final version of the tax reform approved by the Bicameral Conference Committee excludes milk, coffee and 100-percent natural juice products from a P6 tax per liter that will be slapped on beverages using caloric and non-caloric sweeteners. A tax of P12 per liter will also be imposed on beverages using high-fructose corn syrup.

Globe Telecom, meanwhile, rebounded by 3.51 percent along with PLDT, which added 1.53 percent.

GT Capital and Semirara both rebounded by over 2 percent. Meralco also gained by 1.26 percent.

The Senate’s proposal of additional tax on coal – the primary fuel used of most power generation plants in the country – was halved from the original P300 per ton by 2020. It will now be pegged at P50 per ton by 2018, P100 per ton by 2019 and P150 per ton by 2020.

BDO, BPI, Security Bank and Megaworld also firmed up.

On the other hand, SM Investments fell by 1.52 percent. It was the day’s most actively traded stock.

Share prices of Ayala Land, Ayala Corp., SM Prime, Metrobank and Jollibee all declined.