PSEi greets 2018 with new record high
LOCAL STOCKS charged deeper into record territory to kick off the year, riding a raging global bull market fueled by improving outlook for global growth.
The bellwether Philippine Stock Exchange index (PSEi) picked up where it left off in 2017, chalking up a gain of 1.93% to close at a new all-time high of 8,724.13 on Wednesday.
The PSEi is coming off its first annual gain in three years, rising 25.11% last year on the back of stronger foreign fund flows amounting to P56.21 billion compared to P2.80 billion in 2016.
“The back-to-back closing at new record highs on the first trading day of 2018 and last trading day of 2017 is an auspicious sign for our stock market,” PSE President and Chief Executive Officer Ramon S. Monzon said in a statement.
“Investor confidence and optimism were very apparent in today’s trading and we hope our market will remain robust for most of the year.”
Foreign funds continued to scoop up local stocks, staying in net buying territory for the sixth straight session to the tune of P347.99 million on Wednesday, smaller than the P1.79 billion in the prior session.
“We ended 2017 strong. We started the year with a bang,” Miguel A. Agarao, analyst at Wealth Securities, Inc., said in a phone interview.
“You have a global bull market. There was pent-up buying and we saw two days worth of whatever the foreign wanted to buy today.”
The PSEi drew strength from gains elsewhere in Asia, with markets in Thailand and Hong Kong delivering multi-year highs.
Major indexes in Wall Street also notched fresh peaks on the back of a tax reform overhaul seen boosting corporate profits and the US economy.
On the local front, the key driver for optimism is the government’s tax reform program that will fund much-needed infrastructure projects, with more measures likely to be enacted this year after President Rodrigo R. Duterte signed into law last month the first of up to five planned packages.
“It’s not just a one-shot, shortterm thing. It’s a long series of reforms,” Wealth Securities’ Mr. Agarao said, noting that enactment of Republic Act No. 10963, or Tax Reform for Acceleration and Inclusion Act, initially failed to electrify the market but the line-item veto of President Rodrigo R. Duterte sent the right signals to investors.
“We are bullish on the stock market ( this) year,” Michael Gerard D. Enriquez, chief investment officer at Sun Life of Canada Philippines, Inc., said in a mobile phone message.
“We expect company earnings to be stronger especially the property and banking sectors. However, we expect the consumer sector to continue to be challenged due to higher input costs and intensifying competition.”