Philippines shares finish 1.72 percent firmer

Philippines share prices rose 1.72 percent to their highest level in a month on Monday, extending recent solid gains on strong corporate results and hopes Congress will finally pass a long-delayed value-added tax (VAT) bill, dealers said. The Philippine Stock Exchange composite index added 33.00 points to 1,946.77, the day's high. It traded at a low of 1,913.63. The six-day rally pushed the index to its highest level since April 6, when it ended at 1,962.38. Turnover was 455.1 million shares worth 1.23 billion pesos (22.7 million dollars). The broader all-shares index rose 17.43 points to 1,189.37. Gainers beat losers 61 to 24, with 32 stocks unchanged.
"Investors are betting on equities once again, hoping to take advantage of improving share prices and that ongoing discussions on the VAT bill could end quite soon," said Lawrence de Leon of Accord Capital Equities.
"Market players are careful but positive," he added.
Press reports suggest lawmakers are close to a compromise to end a month-old stalemate over proposals to raise VAT, one of the government's proposed measures to improve its fiscal situation. This version reportedly would keep the VAT rate at 10 percent but give President Gloria Arroyo standby authority to raise the tax to 12 percent next year subject to certain conditions.
It also recommends the lifting of the VAT exemption enjoyed by certain sectors and raises the corporate income tax rate by three percentage points to 35 percent.
"We reached oversold levels in the past weeks and we're now bouncing back. The main index has to (sustain its) break (of) the 1,930 level and after that we would then be looking at 2,000 as the next resistance," said Gomer Tan of Regina Capital Development Corp. Top-traded Philippine Long Distance Telephone rose 20 pesos to 1,435 while Globe Telecom advanced 20 pesos to 855. SM Investments was unchanged at 250 pesos. Ayala Land was steady at 8.10 pesos, while parent Ayala Corp rose 10 centavos to 7.20 pesos.
San Miguel A, limited to Filipino investors, was unchanged at 58 pesos. San Miguel B, available to foreign investors, gained 50 centavos to 84.50 pesos.