Stock market seen to break 9,000 next year on tax reform


Posted at Dec 06 2017 09:35 AM | Updated as of Dec 06 2017 03:10 PM

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MANILA - Share prices could rally past the 9,000-point level in 2018, buoyed by gains from tax reform and strong corporate earnings, analysts said Wednesday.

Consumer companies that target the middle class like Robinsons Retail and Puregold are poised to benefit from the lowering of personal income tax rates, BPI Securities research head Haj Narvaez said.

"We think those stocks are good proxies to play tax reform," Narvaez told ANC's Market Edge with Cathy Yang.

Narvaez said the Philippine Stock Exchange Index could hover at the 8,450 level by the end of the year and at 9,200 in 2018 under a "bull case scenario."

Tax reform could add P150 billion to P160 billion in incremental revenues and its effect could be felt by the second half of 2018 if it is signed into law by the end of the year or early next year, Narvaez said.

Bullish corporate earnings "can further propel the local bourse’s main barometer to as high as 8,700 to 9,000," AB Capital Securities said in a statement.

Aside from tax reform, the government P8 trillion infrastructure program will also contribute to the positive outlook for 2018, AB Capital said.