Index dips as traders take profits ahead of EVAT ruling

Share prices closed 0.23 percent higher yesterday as investors opted to take profits ahead of a Supreme Court ruling on crucial tax legislation, dealers said.

They said an overnight gain on Wall Street and a modest retreat in oil prices also helped in the technical recovery. There was also renewed interest in mining issues after government announced it has opened exploration sites for public bidding.

The Philippine Stock Exchange composite index put on 4.51 points at 1,941.41. It traded between 1,935.92 and 1,947.10.

Volume reached 1.8 billion shares worth P637.39 million.

Gainers outnumbered losers 45 to 19, while 53 stocks ended unchanged.

Dealers said investors temporarily relegated to the backseat political concerns after impeachment motions against President Gloria Arroyo were thrown out by the House of Representatives’ justice committee on Wednesday.

Investors are more focused with the Supreme Court’s decision, expected later Thursday or early Friday, on the expanded Value Added Tax (EVAT) law. The court issued an injunction on the law shortly after it came into effect in July after its constitutionality was questioned.

"The impeachment issue is over. So let’s move forward," said Nestor Aguila of DA Market Securities.

"One thing is for sure, investors do not want uncertainties. Without the impeachment issue, we would have been focused on more important issues affecting the economy," added Ron Rodrigo of Accord Capital Equities.

"Investors seem to be taking a bet that the TRO (temporary restraining order against EVAT) would be lifted, while others prefer to wait," he said.

The VAT law is considered the centerpiece of the government’s economic reform agenda and has been described as crucial in efforts to narrow a chronic budget deficit.

Philippine Long Distance Telephone Co. (PLDT), the most active stock, was up P20 to P1,610.

Lepanto Consolidated A, limited to Filipino investors, gained a centavo to 36 centavos. The mining concern’s B shares, available to all investors, advanced three centavos to 38 centavos.

Ayala Land retreated 10 centavos to P8, while parent Ayala Corp. fell P2.50 to 292.50.

San Miguel B shares, open to all investors, ended unchanged at P94.50 and San Miguel A, limited to Filipino investors, was flat at P66.50.

Among stocks favored by investors after having been sold down in past sessions were power distributor Manila Electric B, up 1.1 percent at P23, and electricity producer First Holdings, higher by 1.2 percent at P42.50. – AFP, AP