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WED 17 OCT 2018

Top Story:

Telecom Sector: TEL says proposed common tower policy violates its franchise

Other news: (AS OF OCT 16, 2018)


INDICES
Economy: DBCC turns cautious on economic targets Close Points % YTD%
PSEi 6,987.02 60.51 0.87 -18.36

Market Summary: All Shares 4,289.71 13.13 0.31 -14.03


Financials 1,558.70 13.90 0.90 -30.11
Holding Firms 6,742.34 8.25 0.12 -21.75
The PSEi advanced on Tuesday, gaining 60.51 points or 0.87% to close at 6,987.02. Industrial 10,547.31 153.23 1.47 -6.09
Mining & Oil 8,888.05 91.40 1.04 -22.73
Index gainers led decliners 22 to 7, while 1 issue remained unchanged. All sectors ended in green Property 3,498.91 37.98 1.10 -12.05
Services 1,477.71 5.87 0.40 -8.77
with Industrial (+1.47%) leading the group. Significant index gainers were MEG (+5.00%), URC
(+3.93%), MER (+3.16%), AP (+2.68%), and ALI (+2.55%). On the other hand, significant index Dow Jones 25,798.42 547.87 2.17 4.37
decliners were FGEN (-3.43%), PGOLD (-2.38%), and SMC (-1.63%). S&P 500 2,809.92 59.13 2.15 5.10
Nasdaq 7,645.49 214.75 2.89 10.75

Value turnover increased to Php4.7Bil from Php4.4Bil in the previous session. Meanwhile,
foreigners continued to be net sellers, disposing Php224Mil worth of shares. INDEX GAINERS
Ticker Company Price %
MEG Megaworld Corp 4.41 5.00
URC Universal Robina Corp 137.50 3.93
MER Manila Electric Company 359.00 3.16
AP Aboitiz Power Corp 34.50 2.68
ALI Ayala Land Inc 40.20 2.55

INDEX LOSERS
Ticker Company Price %
FGEN First Gen Corporation 15.22 -3.43
PGOLD Puregold Price Club Inc 41.00 -2.38
SMC San Miguel Corp 163.30 -1.63
RRHI Robinsons Retail Hldgs Inc 75.90 -1.43
LTG LT Group Inc 13.20 -1.05

TOP 5 MOST ACTIVE STOCKS


Ticker Company Turnover
ICT Intl Container Term Svcs 528,758,400
SMPH SM Prime Hldgs Inc 325,327,100
ALI Ayala Land Inc 295,174,500
SM SM Investmetns Corp 271,055,600
BDO BDO Unibank Inc 232,672,900

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DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 17 OCT 2018

Top Story:

ADRIAN ALEXANDER YU Telecom Sector: TEL says proposed common tower


RESEARCH ANALYST policy violates its franchise
Smart Communications Inc, (Smart) a subsidiary of PLDT Inc, (TEL) has said that the proposed
common tower policy violates its legislative franchise, which allows TEL’s wireless unit to build
its own telecommunications tower. Smart submitted a position paper to the Department of
Information and Communications Technology (DICT) stating that the memorandum circular
(MC) cannot amend a legislative measure such as its franchise. In stating that the future
deployment of towers can only be performed by independent tower companies, the draft MC
essentially amends Smart’s franchise.

Smart added that efficient tower models should allow for different ownership model,
including allowing telco companies to build their own towers. Citing cases in Germany, India,
and Indonesia, Smart believes its possible for the government to pursue its infrastructure
sharing policy without violating the franchise of incumbent telco operators. Smart added that
independent tower companies would also have to go through the bureaucracy that incumbent
telco operators do and there is no guarantee that the roll-out would be any smoother.

Sought for comment, DICT acting secretary Eliseo Rio Jr. agreed that the government cannot
prevent the telco companies from building their own towers. The government will not come
up with a policy they cannot impose to prevent them from being sued in court. As such, the
government plans to have a conversation with the telco operators on how to resolve the issue.
(Source: BusinessWorld)

Other news:

RESEARCH ANALYSTS Economy: DBCC turns cautious on economic targets


ANDY DELA CRUZ
JOHN MARTIN LUCIANO The Development Budget Coordination Committee (DBCC) lowered its growth and fiscal
FRANCES ROLFA NICOLAS
goals, as well as raise its inflation forecast. It lowered its GDP growth target for 2018 to
JUSTIN RICHMOND CHENG
6.5% to 6.9% from 7 to 8% and raised its inflation forecast to 4.8 to 5.2% (from 4 to 4.5%) for
ADRIAN ALEXANDER YU
this year and 3 to 4% (from 2 to 4%) in 2019. DBCC cites tighter credit conditions, rising oil
prices, and a worsening Sino-US trade row as the main reasons for these economic forecast
cuts. Nevertheless, it maintained its 7 to 8% GDP growth target in 2019 to 2022, while also
maintaining its inflation target of 2-4% in 2020 to 2022. (source: BusinessWorld)

COL Financial Group, Inc. 2


CALENDAR OF EVENTS DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 17 OCT 2018 OCTOBER


SUN MON TUE WED THU FRI SAT

1 1 2 3 4 5 6

7 8 9 10 11 12 13

14 15 16 17 18 19 20

21 22 23 24 25 26 27

28 29 30 31 28 29 30

1 31 6 7 8 9 10

K E Y E V ENTS HOL IDAY

OCT 2 OCT 9 OCT 23


SMC: EX-DATE PH P0.35 C A S H D IV IDEND F GEN: E X- DAT E PH P0 . 3 5 C A S H D I V I D E N D I P O : E X-DAT E PH P0 . 0 6 C A S H D IVID END
NIKL: A N N UA L S H A R E H O L D E R S M E E T I N G
OCT 3 OCT 25
TB GI : A NNUAL SH ARE HO LDER S M EE T ING OCT 10 S G P: A N N UA L S H A R E H O LD ER S MEE TING
V LL: EX- DAT E PH P0 . 2 2 5 2 C A SH D I V I D E N D T: A N N UA L SH A R E H O L D ER S MEE TING
OCT 4 M W ID E: E X- DAT E P H P 0 . 1 2 C A S H D I V I D E N D AC E : A N N UA L S H A R E H O LD ER S MEE TING
MB C: AN NUAL SH ARE H OLDER S M EE T ING
B COR: A NNUAL SH ARE HO LD ER S M EE T ING OCT 13 OCT 26
W P I: A N N UA L S H A R E H O L D E R S M E E T I N G P H E S : A N N UA L SH A R E H OL D ER S MEE TING
OCT 5 F P I : A N N UA L S H A R E H O L DER S MEE TING
CDC: A NNUAL SH ARE H OLDER S M EE T ING OCT 17 W I N : A N N UA L S H A R E H O LD ER S MEE TING
ID C : A NN UA L S H A R E H O L D E R S M E E T I N G S T I : A N N UA L S H A R E H O L DER S MEE TING
OCT 6
PA: ANNUAL SH ARE H OLDER S M EE T ING OCT 19 OCT 30
D F NN: A N N UA L S H A R E H O L D E R S M E E T I N G S U N : A N N UA L S H A R E H O LD ER S MEE TING
OCT 8
STR: EX-DATE PH P0.0489 C A S H D IV IDEND OCT 20
F EU : A N N UA L SH A R E H O L D E R S M E E T I N G

COL Financial Group, Inc. 3


DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 17 OCT 2018

IMPORTANT RATING DEFINITIONS


BUY
Stocks that have a BUY rating have attractive fundamentals and valuations based on our analysis. We expect the share price to outperform the market in the next six to
12 months.

HOLD
Stocks that have a HOLD rating have either 1) attractive fundamentals but expensive valuations 2) attractive valuations but near-term earnings outlook might be poor
or vulnerable to numerous risks. Given the said factors, the share price of the stock may perform merely in line or underperform in the market in the next six to twelve
months.

SELL
We dislike both the valuations and fundamentals of stocks with a SELL rating. We expect the share price to underperform in the next six to12 months.

IMPORTANT DISCLAIMER
Securities recommended, offered or sold by COL Financial Group, Inc. are subject to investment risks, including the possible loss of the principal amount invested.
Although information has been obtained from and is based upon sources we believe to be reliable, we do not guarantee its accuracy and said information may be
incomplete or condensed. All opinions and estimates constitute the judgment of COL’s Equity Research Department as of the date of the report and are subject to change
without prior notice. This report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. COL Financial and/
or its employees not involved in the preparation of this report may have investments in securities of derivatives of the companies mentioned in this report and may trade
them in ways different from those discussed in this report.

COL RESEARCH TEAM

APRIL LYNN TAN, CFA


VP & HEAD OF RESEARCH
april.tan@colfinancial.com

CHARLES WILLIAM ANG, CFA GEORGE CHING RICHARD LAÑEDA, CFA


DEPUTY HEAD OF RESEARCH SENIOR RESEARCH MANAGER SENIOR RESEARCH MANAGER
charles.ang@colfinancial.com george.ching@colfinancial.com richard.laneda@colfinancial.com

ANDY DELA CRUZ JOHN MARTIN LUCIANO FRANCES ROLFA NICOLAS


SENIOR RESEARCH ANALYST SENIOR RESEARCH ANALYST RESEARCH ANALYST
andy.delacruz@colfinancial.com john.luciano@colfinancial.com rolfa.nicolas@colfinancial.com

JUSTIN RICHMOND CHENG ADRIAN ALEXANDER YU


RESEARCH ANALYST RESEARCH ANALYST
justin.cheng@colfinancial.com adrian.yu@colfinancial.com

COL FINANCIAL GROUP, INC.


2402-D EAST TOWER, PHILIPPINE STOCK EXCHANGE CENTRE,
EXCHANGE ROAD, ORTIGAS CENTER, PASIG CITY
PHILIPPINES 1605
TEL NO. +632 636-5411
FAX NO. +632 635-4632
WEBSITE: www.colfinancial.com

COL Financial Group, Inc. 4