Shares close lower led by PLDT, ahead of VAT ruling
Prospects of a further rise in domestic interest rates also dampened investor sentiment, they added.
The composite index ended down 5.68 points or 0.29 percent at 1,947.46 after trading between 1,941.48 and 1,953.14. Volume turnover reached 306.55 million shares worth 741.26 million pesos.
The all-shares index retreated 5.02 points to 1,179.26.
Losers outnumbered gainers 40 to 18 and 55 stocks closed unchanged.
“There’s a lot of hesitation in the market. Investors are waiting for the court’s ruling on the VAT,” Banco de Oro Universal Bank market strategist Jonathan Ravelas said.
The Supreme Court is expected to rule on whether to lift a three-month old freeze order on the tax law, the centerpiece of the Arroyo government’s fiscal reform program. The tribunal will hold its final deliberation on the case on Tuesday.
On Sept 1, the court voted to uphold the constitutionality of the new VAT law which expands the tax coverage to include previously exempt sectors such as power generation and petroleum products. But the court kept its freeze order until its ruling becomes final.
Ravelas said the likelihood that the central bank will further raise its benchmark overnight interest rates by at least another quarter percentage point before the year ends also weighed on the equities market as this makes fixed-income instruments more attractive to investors.
Dealers said security concerns also resurfaced after the police on Friday used fire hoses to break up a protest march led by a former vice-president and other officials.
It was the second time in as many days that police have used fire hoses to disperse protesters calling for the resignation of Arroyo, whose popularity remains low despite winning an impeachment challenge over allegations she cheated in last year’s elections.