Shares rise as gov’t lifts ban on new mining deals

PHILIPPINE shares climbed further on Thursday as investors continued picking up bargains and after the government lifted a moratorium on new mining agreements to ramp up revenues to help fund increased spending during the pandemic.

The Philippine Stock Exchange index (PSEi) increased by 16.75 points or 0.25% to close at 6,539.96 on Thursday, while the all shares index improved by 12.96 points or 0.32% to finish at 3,997.58.

AB Capital Securities, Inc. Junior Equity Analyst Lance U. Soledad said PSEi gained due to “last-minute buying.”

“Value turnover continued to be muted despite the rally amid looming fragile recovery as the rise in cases has yet to slow down,” Mr. Soledad said in a Viber message.

Value turnover went up to P5.42 billion with 4.30 billion shares switching hands on Thursday, from the P4.68 billion seen the previous trading day with 1.73 billion issued traded.

“Trading volumes remain low as the sentiment is mainly cautious,” AAA Southeast Equities, Inc. Research Head Christopher John J. Mangun said via e-mail.

“Several mining stocks ended with substantial gains after President Rodrigo R. Duterte’s Executive Order 130 was made public earlier today. It allows the government to enter into new mining agreements with corporations, ending the ban that was imposed in 2012,” Mr. Mangun added.

President Rodrigo R. Duterte has lifted a moratorium on new mineral agreements imposed in 2012, reopening the door to fresh mining investments as he seeks to boost state revenues to fund infrastructure projects and other initiatives, Reuters reported.

Mr. Duterte has issued an executive order that allows the government to enter into agreements for new mining projects and undertake a review of existing mining contracts and agreements for possible renegotiation of the terms.

The moratorium had been imposed while the government worked on legislation to boost the state’s share of mining revenues in one of the world’s top producers of nickel, copper and gold.

Under a tax reform law that took effect in 2018, the excise tax on minerals, mineral products and quarry resources has been doubled to 4%.

Majority of the sectoral indices closed in the green on Thursday, except for industrials, which fell by 68.28 points or 0.78% to 8,628.15; and holding firms, which declined by 10.31 points or 0.15% to end at 6,667.39.

Meanwhile, mining and oil gained 449.53 points or 5.38% to 8,802.71; property went up by 44.54 points or 1.39% to 3,245.68; services improved by 7.50 points or 0.52% to close at 1,442.06; and financials rose by 1.48 points or 0.1% to 1,392.41.

Advancers narrowly beat decliners, 103 against 100, while 46 names closed unchanged.

Net foreign selling declined to P591.66 million on Thursday from the P710.73 million recorded in net outflows on Wednesday.

AB Capital Securities’ Mr. Soledad said he expects the PSEi to trade within 6,400 to 6,700 today. — K.C.G. Valmonte with Reuters