Stocks reach new high on sustained optimism

MANILA, Philippines — The stock market, taking the cue from US stocks and benefiting from sustained investor optimism, scaled a new historic high yesterday as the benchmark Philippine Stock Exchange index (PSEi) gained 56.65 points to close at 8,312.93.

Yesterday’s closing level reaffirms the belief that the bulls are back at play, overtaking the bears or the pessimists.

Justino Calaycay of Philstocks Financials said a host of factors pushed the index upward, led by the uptrend in the US stocks and House of Representatives’ package of the Duterte administration’s tax reform program.

 “A lot of this is being driven by US stocks,” Calaycay said.

 The Dow Jones Industrial index traded in record territory yesterday as equities resumed a steady run up that could set the tone for the final three months of 2017.

The rally occurred amid an upbeat tone on Wall Street despite a mass shooting event in Las Vegas that is being described as the worst in US history. European stocks kicked off the week in an upbeat mood, getting a boost from a weaker euro that tumbled after violent clashes in Catalonia in Spain,” Regina Capital managing director Luis Limlingan said.

Total value turnover reached P7.25 billion which traders said still has a lot of room to improve.

Market breadth was positive with advancing stocks edging out decliners, 105 to 94 while 55 issues were left unchanged.

VC Securities Corp., which was formally launched in the stock market yesterday as the newest trading participant, said that if the trend continues the PSEi may even hit 10,000 next year.

“Some are saying the PSEi can even reach 10,000 next year,” said VC Securities president Wilhelmino Agregado.

By the end of the year, he said the market index may reach 8,500.

Calaycay, meanwhile, said investors would also keep a close watch on the progress of the TRAIN or the Tax Reform for Acceleration and Inclusion Act (TRAIN).

“The TRAIN is playing a role. People are seeing we are much closer to the Build Build Build program but it still has to go through bicameral and that’s another round of voting,” he said.

TRAIN aims to slash income tax rates for majority of individual taxpayers, while generating additional revenue for the government’s massive spending on infrastructure and social services by raising the value-added tax base and adjusting in the excise taxes on fuel and automobiles, among other measures.

The House of Representatives approved its version of TRAIN as House Bill No.  5636 last May 31, while the Senate Ways and Means Committee has filed its version as Senate Bill 1592 last September 20. The Senate is set to start plenary debates on its TRAIN version later this month.

Meanwhile, world shares hit their latest in a run of record highs on Tuesday, while the dollar was at its loftiest in 1-1/2 months as encouraging US data lifted it in tandem with global bond yields.

MSCI’s 47-country ‘All-World’ index which contains more than 2,400 firms was pushed to the fresh peak as Europe’s main bourses added to gains made in Asia and after Wall Street set its own record close again overnight. – With Reuters