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WEEK 41_October 11 to 15, 2010

WEEK 41_October 11 to 15, 2010

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Published by JC Calaycay

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Published by: JC Calaycay on Oct 09, 2010
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 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 41_October 11 to 15, 2010
1 of 3
REVIEW October 4 to 8, 2010MARKETS
SHARE PRICES extended gains to a sixth straight week, ending Friday'ssession at 4,236.98, just -8.07 points below the latest all-time high close of 4,245.05 set Thursday. This stretches the 6-week return to 19.06% and theyear-to-date's to 38.8%. At this pace, the index is set to, at the very least re-write the second best annual performance of 42.3% in 2006. 2009's 63% isthe biggest on record for the PSE.Last week's 3.04% gains was in line with the general movement of globalequity markets (
refer to table)
with only a couple slipping, India's BombayExchange (-0.95%) and Jakarta's negligible loss. The Shanghai marketwhich traded only Friday following an extended National Holiday in theMainland, was the only other bourse to register a >3.0% gain.Value turnover has significantly improved. On a montly basis,September's php128 billion turnover is the year's biggest, surpassing thephp117 billion in March this year when the index gained 3.9%.September advanced 15.0%, the year's best so far. October doesn't seem far behind, with the month already up 3.3% up to Friday. Total value month-to-date already account for almost 40% of the 9-month average of php85 billion. Also significant to note (
as may be seen from the bar chart)
is the near-doubling of the flow into the Mining and Oil sector, whose share jumped from the January-to-September average of 5.60% to the current month-to-date's 10.85%. The sector is thus far up 4.9%, the best among all sectors. Holding Firms' piece of the value pie has likewise grown to 26% from its three-quarter average of just under 20%. Conversely, Industrial's contribution was squeezed to 20.8% from 34.14%. Investors have obviously begun to shyaway from these counters given the magnitude of its advance, which although a lower-than-market pace of 3.5% this month yet, has already gained45.06% for the year-to-date. The rest of the other sectors' share have remained at average: Financials (14.4%), Property (14.5%) and Services (13.6%)while rising 2.5%, 3.1% and 4.1%, respectively.
POLITICAL & ECONOMIC NEWS
President Aquino completes his first 100-days in Office with a 60% approval rating based on an SWS survey; critics, expectedly have acontrary read. To the latter group, the first three months of Mr. Aquino's term showed weakness (reaction and inactions on the hostageincident, jueteng expose, among others.)
Tokyo's Rating & Investment Information, Inc (R&I) affirmed the stable outlook on the country's credit rating (BBB) premised on its ability topush through putting the fiscal house in order and undertaking the needed infrastructure projects to support growth – particularly in privateconsumption. It sees the RP economy growing between 5.0% and 6.0% this year.
The country's preliminary Gross Intenational Reserves for September grew 7.2% month-on-month to US$53.5B. This translates to about 9.4months of imports of goods and payments of services and income. It is likewise 9.7x the country's short-term external debt based on originalmaturity and 5.3x based on residual maturity. Contributing hugely to the rise in this account was the global bond issuance (10-yr PesoDenominated), WB program loan, forex operations and investment income plus revaluation gains from the BSP's gold holdings as worldprices of the precious metal climbed.
Inflation for the month of September slipped to 3.5% year-on-year, -0.5% slower than the August level. The year-to-date figure fell 0.1% to4.1%, well within the government's target range of 3.5% to 5.5% for the current year. Excluding food and fuel prices, core inflation fell to3.8% from 4.2% the previous month.
The BSPs Monetary Board left rates unchanged in its meeting last Thursday. Overnight borrowing or reverse repurchase rates have been at
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 NOCIRCUMSTANCES 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 NOTREPRESENT 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 ANYINFORMATION 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.
 
0.00%5.00%10.00%15.00%20.00%25.00%30.00%35.00%9 MO AVG OCTfinancialindustrialholding firmspropertyservicemining & oil
 
 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 41_October 11 to 15, 2010
2 of 3
4.0% since July 2009. The Board maintains a 200-basis point spread to its overnight lending or repurchase rate. At the end of the day, theMB remains alert for possible inflationary pressures going forward to ensure that monetary policy stays in line with growth targets.
CORPORATE DEVELOPMENTS
Globe Asiatique, once primed to be the Exchange's first IPO for the year, and its officers may face charges of falsicifation of documentsand/or fraud, if the Home Development Mutual Fund or Pag-Ibig takes on Sen. Juan Ponce Enrile's recommendation. Earlier, it wasdiscovered that nearly 2,000 “spurious” borrowers were believed used to justify the release of php6.68B government loans for the firm'shousing project in Pampanga. The company's shares would have been listed for trading last month until it wrote the Exchange citing thewithdrawal of BDO Capital and Investment Corporation's resignation as issue manager in seeking the withdrawal of its listing application.The approval for such listing was revoked by the PSE Board last August 25, 2010.
The much -awaited public offering of the shares of leading low cost carrier Cebu Pacific, Inc. will finally push through on October 26
th
, movedfrom the 25
th
which was earlier declared a non-working holiday. Last Friday, the Offer Price was pegged at php125 per share, a little over themidpoint of its earlier indicated range of php110 to php135. At the final price, the Offer translates to a PE of 22.35x, on level with theTransportation sub-sector's end-July PE of 22.5x. It is likewise at almost 7x its end-2009 per share book value of php17.89. At total of 30.7Mprimary and 155.98M secondary shares will be offered to the public. Selling shareholder is CPAir Holdings, Inc., which owns 100% of thecarrier.
The anticipated listing and introduction to the local bourse of a new instrument, the Real Estate Investment Trusts (REITs) has beeneffectively shelved by the Exchange citing the delays in the release of the tax rules. The government is seeking to raise the amount of REITshares to be offered to the investing public from one-third to at least half. Listed firms Ayala Land, Inc., SM Prime Holdings, Inc., andRobinson's Land Corporation have all signified their interest to tap into the REIT to raise funds.
DISCLOSURES
MARCVENTURES HOLDINGS, INC [pse: MARC, formerly AJO]Last Traded: php.023 (October 7, 2010, Thursday), -4.2% w-o-wVolume Turnover: 1,626,599,936, -12.6% w-o-wTrading in MARC shares will be suspended through the first hourMonday, following a change in its par value from php0.01 to php1.00 asearlier approved by its shareholders (July 2010) and the SEC (September2010.) The issuer's outstanding shares are thus adjusted to 551,006,329translating to its market price consequently adjusting to php2.30.
Technical signals are mixed, with price movements contained in adowntrend. A “rounding bottom” has developed over the last 13 weekswith a interim top at the php0.027 (adjusted post change of par to php2.70.) RSI traces a near-term upside momentum carrying to the 40-level from an oversold condition of 24.40 (php0.017 – 0.018). STO however signals a possible SELL as it is poised to go under the trigger line as it hovers within the overbought field. Immediate resistance past the php2.70 level is at php3.30, filling in a downside break-away gap.
NEUTRAL
INFORMATION CAPITAL TECHNOLOGY VENTURES, INC [pse: ICTVLast Traded: (10/8/10) php0.62, +1.6% w-o-wVolume Turnover: 222,000, +212.7% w-o-w.The Company subscribes to 53,937 new shares of Holy Cow Animation,equivalent to a 50% equity interest. The Subscription Agreement is stillsubject for approval by the latter's Board of Directors. The firm providescomputer-aided animation services for both TV and film, inclusive of conceptualization, production and execution as well as programs andadvertising campaigns utilizing animation. It also hires production staff and voice talents.
The stock's weekly chart show it has broken below the base of adescending triangle on relatively stable volumes. The base of the trianglecurrently serves as the resistance mark, php0.82. Exponential movingaverages across all time periods, 10-, 50, and 150- are converging around php0.63-0.64, suggesting a sideways movement. There is a slight pick-up in price
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 NOCIRCUMSTANCES 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 NOTREPRESENT 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 ANYINFORMATION 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.

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