Eyes on consumer firms as TRAIN bill advances

It is now up to consumer firms or other companies that will be directly affected by the Tax Reform and Acceleration Inclusion (TRAIN) bill to make sure necessary adjustments are made to ease the reform's impact to the demand in their products.

Online brokerage 2TradeAsia.com said the local market actually cheered the TRAIN scheme and all is set for the demand ride.

"While the structure entails pass-on costs, it would be up to consumers to adjust their spending practices based on the merits of the approved increase (vehicle, tobacco, sweetened beverages, cosmetics). The sensitive play however would be on excise taxes on coal and oil, given its direct impact on electricity and transport prices," the brokerage firm said.

"With the bulk of pricing for these items indexed to global pricing however, it would now depend on listed firms' hedging strategies, to ensure margins are maintained and disruptions to demand are minimized. After all, consumers would end up with improved purchasing power (and savings) as wider tax exemptions onhold," it added.

Some listed companies that will be affected by the tax reform package includes the country's biggest coal miner Semirara Mining and Power Corp., Universal Robina Corp., PepsiCola Products Philippines, Inc., Roxas Holdings, Inc., among others.

For the next few days, immediate support is pegged at 8,270 to 8,300, while resistance is at 8,460 to 8,520.

Last week, Philippine shares ended on the positive territory, with Philippine Stock Exchange index (PSEi) gaining 32 points, or 0.4 percent, to close at 8,337. Overall, the benchmark index was supported by financials and industrial sectors.