ACCORD CAPITAL EQUITIES CORPORATION

GF EC-058B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City, PHILIPPINES 1605 (632)687-5071 (trunk)
Outlook for Week 35_August 31 to September 3, 2010
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HIGHLIGHTS:

• RP stocks among top performers; nears bull

• Underlying economic fundamentals support optimism
• Macroeconomic targets kept unchanged
• Technicals keep bullish lines

ENTERING Week 35 of trades for the year, Philippine stocks count among
the top perfomers in the world. As may be gleaned from the table (right),
the American, European and much of the Asia Pacific indexes are in the red,
year-to-date. Southeast Asia leads with Thailand (not included in the list)
and Indonesia already past the 20% bull marker. The PSE Index, which
returned 63% in 2009, is running a year-to-date return of 16.58%, despite
losing -1.0% last week.

The exuberance of the local market finds justification in two consecutive

quarters of rather “surprising” GDP growth pace. Last week, the second
quarter came in at a strong 7.9%, exceeding estimates. This is a welcome
follow-through to the first quarter's 7.8% growth, revised from an earlier
figure of 7.3%. The last time the country sustained a 7.0%+ pace for two
quarters was in 2004 with the first two quarters expanding 7.2% and 7.1%,
respectively. This brings the first six month figure to 7.9%, the highest since
1988's 9.3%.

Growth was led by the Industry sector's 15.8% as manufacturing sustained

Q1 production to meet improved both domestic and external demand.
Services grew 6.4% while the Agriculture, Fisheries and Forestry sector, hit
by the El Nino weather phenomenon, slipped 3.0%, the third in as many
quarters it has done so.

While the tragic hostage-taking incident at the Quirino Grandstand last Monday is seen to have an impact, both in terms of tourist arrivals and
exports (HK nationals form a big chunk of our tourist arrivals and the nation was our fourth largest source of export dollars in the most recent
period reported), government remains optimistic enough to keep full-year targets unchanged. GDP is forecasted to hover between 5% and 6%
while the budget gap is kept at php325 billion, even as the first seven months shortfall has already reached php229.4B or 70.5% of programmed.

Inflation for the month August is seen at between 3.6%-4.5%, according to the Bangko Sentral ng Pilipinas. It stood at 3.9% in July while the year-
to-date average is at 4.2%. The BSP forecasts a full-year inflation of 4% for 2010 while raising the 2011 goal by 25 basis points to 3.25%. Earlier,
the Monetary Board kept policy rates untouched. Policy makers have shaved 200 bps from local rates from December 2008 to June last year. It
has not effected any adjustments since.

TECHNICAL CONDITIONS:

Despite the rise of pessimism last week, the market managed to keep
the bears in check. The index sustains levels above its 10pd-, 50-pd
and 150-pd EMA's with the latter two keeping a positive slope even as
the 10pd-line is seemingly entering a flat heading.

RSI (14) is approaching a normative, modal level at which it

“rebounds” as it keeps a positive bias while STO (bottom) draws a
crossover of the trigger line, a buy signal, even for just the short-term.

Major support is drawn at the 3,530 line while resistance past the
psychological 3,600 mark is at 3,620.

Services and Mining & Oil counters have lagged the over-all market's
16.58% return, as well as its sectoral peers. Both have negative year-
to-date returns of -0.85% and -14.06%, respectively.

DISCLAIMER: THE MATERIAL CONTAINED IN THIS PUBLICATION IS FOR INFORMATION PURPOSES ONLY. IT IS NOT TO BE REPRODUCED OR COPIED OR MADE AVAILABLE TO OTHERS. UNDER NO
CIRCUMSTANCES IS IT TO BE CONSIDERED AS AN OFFER TO SELL OR A SOLICITATION TO BUY ANY SECURITY. WHILE THE INFORMATION HEREIN IS FROM SOURCES WE BELIEVE RELIABLE, WE DO NOT
REPRESENT THAT IT IS ACCURATE OR COMPLETE AND IT SHOULD NOT BE RELIED UPON AS SUCH. IN ADDITION, WE SHALL NOT BE RESPONSIBLE FOR AMENDING, CORRECTING OR UPDATING ANY
INFORMATION OR OPINIONS CONTAINED HEREIN. SOME OF THE VIEWS EXPRESSED IN THIS REPORT ARE NOT NECESSARILY OPINIONS OF ACCORD CAPITAL EQUITIES CORPORATION ON THE CREDIT-
WORTHINESS OR INVESTMENT PROFILE OF THE COMPANY OR THE INDUSTRIES MENTIONED.