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 XXV_June 21 to 24_TD 119-122
1 of 3 WEEKLY MARKET STATS UPDATE:
CATEGORY ACTIVITY [YTD DAILY AVERAGES] M EASURE NET VOLUM E NET VALUE ISSUES TRADED TRADES FOREIGN (BUY) FOREIGN (SELL) FOREIGN (NET) AD Line %K STO(14,3) %D (STO(14,3,3) RSI(14) EM A(10) EM A(50) EM A(150) VALUE 2,807,417,588 4,489,360,219.49 173 14,886 2,178,866,689.64 2,051,943,132.18 126,923,557.46 -883.00 24.97 20.97 40.89 4,198.37 4,206.41 4,069.17 PREVIOUS W EEK 2,834,409,774 4,484,687,751.92 172 14,955 2,178,934,273.73 2,048,279,430.89 130,654,842.84 -763.00 34.87 39.84 45.43 4,251.82 4,214.95 4,062.37 CHANGE% -0.95% 0.10% 0.58% -0.46% 0.00% 0.18% -2.86% 15.73% -28.41% -47.35% -9.99% -1.26% -0.20% 0.17% END-DEC2010 1,637,867,112 4,603,800,556.27 N/A N/A 1,972,980,083.85 1,752,691,290.38 220,288,793.48 -508.00 95.12 72.13 56.61 4,149.40 4,119.42 3,839.39 CHANGE% 71.41% -2.49% N/A N/A 10.44% 17.07% -42.38% 73.82% -73.75% -70.92% -27.77% 1.18% 2.11% 5.98%

INDICATORS

PHILIPPINE MARKET STATS LAST WEEK% PSEI 4,153.11 -3.36 ALL 2,944.01 -2.54 FIN 912.43 -5.18 IND 7,108.98 -1.21 HDG 3,465.06 -2.08 PRO 1,483.60 -3.43 SVC 1,459.20 -5.25 M&O 18,295.80 -2.80 WORLD MARKETS INDEX LAST WEEK% DOW 12,004.40 0.44 S&P 1,271.50 0.04 NASDAQ 2,616.48 -1.03 FTSE 100 5,714.94 -0.88 DAX 7,164.05 1.33 CAC 40 3,823.74 0.49 MSCI APEX 50 846.44 -3.16 TOPIX 805.34 -1.47 NIKKEI 225 9,351.40 -1.71 HANGSENG 21,695.30 -3.23 SHANGHAI 2,642.82 -2.30 TAIEX 8,636.10 -2.28 KOSPI 2,031.93 -0.72 S&P/ASX 200 4,484.90 -1.69 ALL ORDINARIES 4,551.10 -1.81 NZ50 3,469.59 -0.60 SET 1,018.96 -0.14 JCI 3,722.30 -1.73 BSESN 17,870.50 -2.18 Straits Times 3,005.28 -2.37 KLCI 1,563.43 0.47 HO CHI MINH 438.93 -1.36 INDEX

YTD% -1.14 -2.08 -5.10 -1.55 2.25 -6.25 -8.25 31.18 YTD% 3.69 1.10 -1.37 -3.14 3.61 0.50 -2.27 -10.40 -8.58 -5.82 -5.89 -3.75 -0.93 -5.49 -6.10 4.85 -1.34 0.51 -12.87 -5.79 2.93 -9.44

PE 14.91 19.29 12.50 18.71 13.20 20.05 12.45 34.18 PE (ttm) 13.18 14.49 22.14 13.81 12.33 11.41 14.17 15.97 17.12 11.53 14.82 15.54 20.06 15.69 22.47 21.90 12.97 17.12 16.18 10.18 16.69 9.31

MARKET STATISTICAL HIGHLIGHTS: Week 24

• • • • •

Trades shifted from bigger-lot, cheaper counters, mostly third-line, speculative to smaller-lot, second & first line issues Breadth remains negative, with the AD ratio indicating sustained bearish bias Foreigners lightened up positions although remaining positive Philippine equities are fairly valued in terms of PE vis-a-vis selected major global and regional peer indexes Service, Financial and Holding Firms sectors are trading at below market PE

W

ORRIES about the health of the US economy and Europe's debt were the central theme of this week's trades. However in slight contrast to the preceding week's almost unbridled slide, week 24 saw sentiments swinging between cautious optimism and general pessimism from one day to the next. Thus market indexes posted alternating positive and negative closes. Unfortunately, the magnitude of the drops continued to be greater than the gains painting a still negative bias heading into week 25. Global markets generally posted marginal gains or significant drops week-on-week, narrowing year-to-date gains off highs and pushing others deeper in the negative. US and European markets posted gains on the week, except for tech-heavy Nasdaq in the US and London's FTSE 100. Only Kuala Lumpur, Malaysia equities escaped the sell-off with a 0.47% gain.
PE (ttm)
5.00 10.00 15.00 20.00 25.00

At home all sectors slumped, widening year-to-date losses. Owing to the recent run-up in oil and commodity prices, plus corporate news and rumors on certain component issues however, the Mining and Oil sector continues to show a huge 30% year-to-date gain, nonetheless. On a positive note, valuations remain low, based on PE multiples. Philippine shares are ranked along the median line among 23 selected major global and regional peer markets. Narrowing the selection to the Asia-Pacific area, the country's rank continues to straddle the midline. It lies slightly above it among its ASEAN 6 peers.

HO CHI MINH Straits Times CAC 40 HANGSENG DAX SET DOW FTSE 100 MSCI APEX 50 S&P PSEI SHANGHAI TAIEX S&P/ASX 200 TOPIX BSESN KLCI NIKKEI 225 JCI KOSPI NZ50 NASDAQ ALL ORDINARIES

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 CREDITWORTHINESS OR INVESTMENT PROFILE OF THE COMPANY OR THE INDUSTRIES MENTIONED.

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 XXV_June 21 to 24_TD 119-122
2 of 3

The PSEI broke under a 2.5 month, 135-point (3.2%) trading band as it slipped -1.6% last week. Three attempts to break through the 4,335-resistance line failed as value flow favored distribution. This opens up the prospects of a full retreat to and test of the 4,070-4,100 major support line. The lower end coincides with the 38.2% Fibonacci retracement point based on the advance from the February low of 3,705.18 to the 4,335.04 top last May 11th. A further breach presents an increasing probability of a slide towards the 3,970-4,000 range. The numbers shown in the statistical summary above does not give a positive picture moving into next week. The shift towards second-line and first-line counters is merely reflective of short term opportunities presented by the extended slide, and quite possibly, early positioning for the next earnings cycle. At the end of the week preceding last (week 23), 21 of the 31 main index components posted retreats of varying degrees from -0.34% to as much as -5.26% by Aboitiz Power Corporation [pse: AP] and SM Investments Corporation [pse: SM], respectively. Of the 21, at least half, or ten (10) lost more than 2.5% versus the PSEI's -1.8% over the same period. Last week, AP topped the list with gains of 6.95% while SM held steady. Despite the general pessimism which saw the PSEI break under the 4,170-support line, only a handful of issues did likewise. Banco de Oro Unibank, Inc. [pse: BDO, php51.80], Bank of the Philippine Islands [pse: BPI, php53.95], Robinsons Land Corporation [pse: RLC, php11.18] and Philippine Long Distance Telephone Co. [pse: TEL/ nyse: PHI] fell under support. Alternatively, the same number of counters defied the move, instead breaking above their respective resistance marks: Alliance Global Group, Inc. [pse: AGI, php10.34], Metro Pacific Investments Corporation [pse: MPI, php3.62], Aboitiz Power Corporation [pse: AP, php31.55], Manila Water Corporation and [pse: MWC, php19.34]. The rest of the PSE component issues held within their respective support-resistance bands.

STOCK PSEI SECB AGI RLC FLI AP ABS MEG

Price 4153.04 93.05 10.34 11.18 1.19 31.55 40.00 1.90

PE (TTM) 14.54 5.38 8.69 8.82 9.37 9.48 9.89 9.90

P/BK 1.47 1.17 1.15 0.73 5.10 1.81 0.93

The prevalence of “undervaluations” are highlighted by the fact that based on trailing twelve month earnings, nearly half, or 15, of the index components are trading at below the PSEI's multiple. Dominating the list are property counters. This list only includes those with PE of below 10x trailing earnings. The bargainargument is further magnified by comparing its current market price to its equity book value. The same issues in the list show all, except power firm AP, trading at no more than 2.0x BV. Note that the list includes AGI and AP which broke resistance and RLC which fell under support at last week's trades. We place a BUY tag on these issues, both on momentum and valuation points.

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 CREDITWORTHINESS OR INVESTMENT PROFILE OF THE COMPANY OR THE INDUSTRIES MENTIONED.

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 XXV_June 21 to 24_TD 119-122
3 of 3 POSSIBLE MARKET MOVERS: WEEK 25

The European Debt. Germany showed a “softening” stance in the deadlock hindering the progress of a second bail-out for Greece, after it admitted the “Vienna-initiative” could form the basis of an agreement among the region's economies to extend assistance to Greece, the second in a little over a year. The so-called “Vienna initiative” calls for holders of Greek bonds to “voluntarily” share the burden of a bail-out scheme. Earlier, the continent's biggest economy insisted that private bondholders be mandated to shoulder a substantial share of a rescue via a restructuring of the maturities of the instruments they hold. This avenue, in the eyes of the ECB, is tantamount to a default. • Outside the negotiating table seeking to tie up differences to arrive at a compromise solution, political tensions rise in Greece, with the citizens opposing a proposed austerity measure. This had led PM George Papendrou to shuffle his Cabinet and submit to a confidence vote. US Debt Ceiling and Economic Data. Hidden from view in an avalanche of poor economic numbers and the Greece-crisis, the US government remains locked in a battle with Congress as it seeks to raise the $14.3 trillion debt ceiling, already reached last month. By the first week of August, the Obama economic team will run out of maneuvers, and without a compromise solution, the world's largest economy will be in technical default of its obligations. This is not something an already roiled financial markets need at this time. • High-impact data are on the taps this week with forecasts still generally biased towards weaker results. • Tuesday, June 21 (2200H, Manila) Existing Home Sales forecast numbers to show a 4.83M pace from the previous period's 5.05M; • Thursday, June 23 (0030H, Manila) Federal Funds Rate seen to be unchanged at >0.25%; (2030H, Manila) Unemployment Claims seen unchanged at 414k; (2200H, Manila) New Home Sales expected to drop to an annual pace of 311k from 232k; and • Friday, June 24 (2030H, Manila) Core Durable Goods Orders (m/m) estimated to show a rise of 1.0%, reversing the -1.6% contraction of the previous month. Other macro- considerations • The IMF has lowered its global economic growth outlook by a tenth of a percent to 4.3% in 2011 • US is seen to expand at 2.5%, lower than previous projections of 2.8% in April and 3.0% at the beginning of the year • Japan is in a recession, but will post positive growth next year • The Eurozone will be driven by Germany and France to pull a 2.0% pace, ahead of the 1.6% earlier seen • China will continue to lead with 9.6%, with the rest of the emerging markets at 4.5%

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 CREDITWORTHINESS OR INVESTMENT PROFILE OF THE COMPANY OR THE INDUSTRIES MENTIONED.

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