Both the peso and the local stocks surged on the first trading day of 2018, following a record close on Wall Street and on optimism about the implementation of the first package of the government’s tax reform program.
The peso gained P0.12 or 0.2 percent Wednesday to close at 49.81 against the US dollar, its strongest level in six months, or since it settled at 49.63 a dollar on June 15, 2017.
Bangko Sentral ng Pilipinas Governor Nestor Espenilla Jr. said earlier domestic fundamentals remained attractive, and “lately reinforced by Train [Tax Reform Acceleration and Inclusion Act] approval.”
Espenilla also said the stronger peso was due to a “combination of strong remittances and equity inflows as well as US dollar softness over uncertainty of impact of US tax legislation.”
Meanwhile, stocks jumped on the first day of trading to set a new record. The Philippine Stock Exchange index, the 30-company benchmark, jumped 165 points, or 1.9 percent, to settle at 8,724.13, the first time it reached the 8,700-point level. The bellwether climbed 25.1 percent last year.
The broader all-share index gained 64 points, or 1.3 percent, to close at 5,054.65, also an all-time high, on a value turnover of P7.3 billion. Advancers outnumbered losers, 118 to 102, while 38 issues were unchanged.
Seventeen of the 20 most active stocks ended in the green, led by Bloomberry Resorts Corp. which advanced 5.9 percent to P11.54 and Melco Resorts which climbed 5.7 percent to P7.85. SM Investments Corp., the holding company of the Sy family, rose 5.1 percent to P1,040.
Asian equities continued their positive start to the year on Wednesday following more record closes on Wall Street, but the dollar faced further selling pressure.
Analysts warned that global markets could face an uncertain year as Donald Trump’s tax cuts have already been priced into valuations, while central banks are on course to start winding back on years of cheap money.
Investors have kicked off 2018 off in buoyant mood as the world economy stirs to life and job creation, particularly in the US, picks up.
After Tuesday’s broad advances, Asia was given a strong lead from Wall Street where technology firms were the standout performers”•with Apple, Amazon and Google-parent Alphabet all gaining close to 2 percent.
The tech-rich Nasdaq and the S&P 500 ended at all-time highs while the Dow ended just shy of a new record.
Hong Kong was up 0.1 percent in the afternoon, building on a six-day rally, while Shanghai closed up 0.6 percent, Sydney gained 0.2 percent and Singapore put on 0.5 percent.
Seoul rose 0.3 percent, with investors given some cheer by North Korea’s promise to restore a hotline with the South and Kim Jong-Un’s softer tone towards its neighbor.
Wellington was 0.3 percent higher and Taipei jumped 0.9 percent. Tokyo was closed for a public holiday.
Tech firms were among the big winners, with AAC Technologies up one percent in Hong Kong, adding to Tuesday’s 7.5 percent jump, while Tencent rose 0.5 percent. Samsung climbed more than one percent in Seoul.
with AFP, Bloomberg
