Manila, Philippines – The Philippine Stock Exchange broke new short-term highs today. The index breached the 7600 level before finally settling at 7514, rising by 66.98 points or 0.90 percent. The broader all-share index is up by 0.67 percent.
Most of the sub-indices are up for the day except for the Industrial and the Mining & Oil sub-index. The best performing sub-index is the Financial sector, which rose by 2.37 percent.
On the other hand, the worst performing sector is the Mining and Oil sector, which dropped by 0.74 percent.
Within the Financial sector, BDO was higher by 4.65 percent, at 135.00. BPI closed at 98.80, up 2.92 percent. MBT is also higher by 0.68 percent, to close at 73.50. PNB closed at 48.00, rising by 1.05 percent.
Within the Mining and Oil sector, SCC closed at 32.50, lower 1.66 percent. PXP is down 4.33 percent, to close at 10.60. APX closed lower at 1.44, or 1.37 percent. LC is also lower by 0.80 percent, to settle at 0.124.
The most active stocks today include ALI with PHP 857 million in traded value. MBT also made it to the top gainers with a traded value of PHP 520 million. SM also had PHP 466 million in traded value.
Significant gainers for the day include MRP higher by 11.20 percent, BLOOM by 10.60 percent, RCI by 8.97 percent, LRW by 5.88 percent, and PLC by 5.43 percent.
Notable losers include OPM down by 7.69 percent, BSC by 6.15 percent, FGEN by 5.73 percent, and BHI by 4.92 percent.
There were 127 advances and 72 declines, while 46 names remain unchanged. Value turnover totaled PHP 6.77 billion. Foreign exchange rate stood at USD 1: PHP 53.42.
Yesterday, the Department of Finance stated that the cost of granting tax incentives far outweighs the overall benefits to the country’s economy.
The government was able to prepare a cost-benefit analysis of the said incentives. This was during its third hearing for the second tax reform package on corporate income tax and perks, which was conducted by the House of Representatives Ways and Means Committee.
The analysis showed that the country would only gain PHP 0.60 for every peso granted as tax incentives. Furthermore, the government spent PHP 257,000 to generate just one job in a registered investor.
The agency also noted that for every peso given as an incentive, the government would be able to collect 32 centavos as incremental taxes. It clearly shows that the government is at a loss in this trade-off.
The agency also said that non-manufacturing companies like quarrying, housing, services, and energy have unnecessary incentives.
The Board of Investments (BoI) and the Philippine Economic Zone Authority (PEZA), however, had a different take on this scenario. They believe that the government is seen to receive an additional PHP 2.02 of taxes for each peso spent as an incentive.
The current proposition is that corporate taxes will be reduced gradually to as low as 20 percent from the current 30 percent.
The market made new short-term highs today after it broke above immediate resistance. The 15 EMA and 20 SMA are poised for a bullish crossover with the 50 SMA.
The 50 SMA appears to be acting as support. MACD is still bullish. RSI is also bullish but is not yet at overbought levels. Support is estimated at 7482 while resistance is expected at 7621.
Foreign Fund Flow
PSEi registered a Net Foreign Buying worth P246,301,627.11 as of July 25, 2018.
On a 30-day trading period, PSEi is on a Net Foreign Selling worth PHP15,172,890,431.22.
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