New milestone as Philippine stocks breach 8,300 mark

MANILA, Philippines – The Philippine Stock Exchange index (PSEi) continued its rally and achieved another new record on Thursday, September 21, breaching the 8,300 level for the first time.

This came as investors mainly reacted to the US Federal Reserve’s expectation that it would raise rates at least one more time before 2017 ends.

At the close of Thursday’s trading, the PSEi was at 8,286.86 points, up by 67.54 or 0.8% from Wednesday, September 20. All sectoral indices also ended higher with the Holding Firms and Industrial counters up the most, gaining 1.3% and 1%, respectively.

The PSEi also hit a fresh all-time intraday high of 8,321.81 on Thursday. (READ: How a Fed rate hike impacts the Philippine economy)

“Philippine stocks soared once more testing record highs in reaction to the latest Federal Open Market Committee’s (FOMC) minutes and anticipation of the outcome of the Bangko Sentral ng Pilipinas’ (BSP) Monetary Board meeting,” Marita Limlingan, president of Regina Capital Development Corporation, said in a note.

Although the Fed left rates unchanged on Wednesday, it penciled in one more rate hike by year-end.

Twelve of 16 officials projected that the Fed would raise rates at least one more time this year. “The median projection for the longer-run level of interest rates also edged down to 2.75% in the latest projections, versus 3% in June,” Limlingan said.

Year to date, the PSEi has gained 21.1%.

Local noise

Ignoring the political noise happening here, investors also banked on the nearing implementation of the much-awaited tax reform package and better Philippine economic growth projections, according to an analyst.

These developments happened as thousands of people gathered in parts of the country on Thursday, to look back on the declaration of martial law 45 years ago.

The Senate on Wednesday filed its version of the tax reform bill, seeking to exempt 3.2 million Filipinos from income tax.

Socioeconomic Planning Secretary Ernesto Pernia also said on Thursday that he expects to hit close to mid-range of the government’s full-year economic growth target of 6.5%-7.5%.

The economy grew by 6.5% in the 1st half of 2017. This means that the country’s gross domestic product will have to expand by 6.5% in the 2nd half of the year to meet the lower end of the government’s goal. – Rappler.com