Philippine shares continued to climb on Wednesday as investors picked up bargains and amid improved market sentiment.
The Philippine Stock Exchange index (PSEi) went up by 110.74 points or 1.76% to end at 6,374.68 on Wednesday, while the broader all shares index rose by 51.50 points or 1.53% to 3,412.88.
“The local bourse surged by 110.74 points (1.76%) to 6,374.68, thanks to continued buying of local investors amid optimism towards the fourth quarter. Investors are also taking the opportunity to buy shares at bargain levels,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.
“Today’s upward market movement can be attributed primarily to a substantial rebalancing event that triggered changes in index composition, closely watched by investors,” Seedbox Securities, Inc. Equity Trader Moses Frando said in a social media message on Tuesday.
Effective Tuesday, Bloomberry Resorts Corp. and Century Pacific Food, Inc. became part of the main index, replacing Aboitiz Power Corp. and Metro Pacific Investments Corp.
He added that sentiment improved as the Securities and Exchange Commission (SEC) said it supported a proposed measure lowering the stock transaction tax.
The SEC on Tuesday said it supports House Bill (HB) No. 9277, which seeks to lower the stock transaction tax to 0.1% from the current rate of 0.6%.
The measure also aims to reduce the tax dividends of foreign nonresidents to 10% from 25%.
HB 9277, which is pending at the committee level, is a substitute bill to HB 8958 filed by Albay Rep. Jose Ma. Clemente S. Salceda on Aug. 23. HB 8958 also proposed lower taxes on stock transactions to encourage greater participation of local and foreign investors in the Philippine capital market.
“The market displayed robust activity, marked by a strong rally that propelled the PSEi to close at its resistance level of 6,374. This resulted in a surge of interest among investors looking for undervalued opportunities…,” Mr. Frando added.
Value turnover went down to PHP 6.73 billion on Wednesday with 764.54 million shares changing hands from the PHP 35.16 billion with 6.41 billion shares seen on Tuesday.
All sectoral indices rose on Wednesday. Financials gained 41.55 points or 2.27% to end at 1,864.86; holding firms went up by 105.98 points or 1.78% to 6,058.11; industrials rose by 119.68 points or 1.34% to 9,042.69; services climbed by 18.77 points or 1.25% to 1,516.82; property increased by 30.53 points or 1.17% to 2,637.75; and mining and oil added 60.84 points or 0.58% to close at 10,506.67.
Advancers outnumbered decliners, 118 versus 74, while 42 shares closed unchanged.
Net foreign selling declined to PHP 301.32 million on Wednesday from PHP 15.20 billion on Tuesday. — SJT