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 XVIII_May 2 to 6_TD 084-088
1 of 3

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OUTLOOK FOR WEEK 18
ORPORATE earnings, positive macros and last week's momentum may spur the index towards the 4,370-
4,400 range in the next five sessions. On the other hand, technical suggestions of overcooked valuations
will lend the contravening force that will intermittently introduce caution-induced caps on rallies. At the end
of the week, optimists are likely to have the edge.

Adding liquidity and drawing interest is the resumption of trading in the shares of San Miguel Corporation [pse: SMC],
coinciding with the listing of the Offer shares on Wednesday, May 4th. A total of 110.32 million shares were offered at
php110.00 to investors. A quarter of the total will come from the Treasury Shares while the balance, or 75%, are being
sold by major shareholder Top Frontier. The shares last traded on April 12, ranging between php150-php174, settling at
php153.00, or -11.6% down from the prior day's close and php10.80 less than its ending level in 2010.
Early concerns on weaker profits in light of the un-anticipated events through the first three months of the year have been
cast aside, following encouraging numbers posted by Earnings Scorecared Q1 2011
early reports. At least five (5) listed firms have, through COMPANY REVENUE YOY% NET INCOME YOY %
press releases, shown substantial improvements both in SMDC 3,400 70% 916 45%
revenue and net incomes. Except for COAT php2.53,
PX 3,864 59% 1,310 151%
-1.2%) share prices of all the reporting firms posted
AGI 44,500 15% 9,500 40%
modest weekly gains: SMDC(php9.06, +1.0%);
COAT 1,490 7% 205 28%
PX(php17.80, +0.3%); AGI(php11.86, +1.2%);
SMPH 6,070 13% 2,120 12%
SMPH(php12.00, +0.7%.) PNX posted the biggest gain at
16.9% to php14.50. PNX 6,100 122% - -

SENIOR DEBT On the macro-front, investors may find yet another boost of
OUTLOOK
COUNTRY confidence after the Japan Credit Rating Agency (JCRA) affirmed
FOREIGN LOCAL FOREIGN LOCAL
SINGAPORE AAA AAA Stable the country's Foreign and Local Currency (FC & LC, respectively)
Stable
THAILAND A- A Stable long-term senior debts rating of BBB- and revising the outlook to
Stable
positive from stable. Under their definitions, a BBB rating, the
MALAYSIA A A+ Stable Stable
fourth highest, “signifies an adequate level of capacity to honor
PHILIPPINES BBB- BBB- Positive Positive
financial commitments...” A positive outlook means that the
INDONESIA BBB- BBB Stable Stable
rating may be raised. Based on the latest reports for each of the
VIETNAM n/a n/a n/a n/a
ASEAN 6 economies, the Philippines shares a similar rating with
Indonesia, although the latter's outlook is a “notch” lower at stable, the same outlook for the rest of the group. Singapore
has the highest rating, with both FC and LC at AAA. Only Vietnam has no available rating report.

Two important domestic economic data are scheduled for MAR 2011 FEB 2011 YTD YOY
release towards the end of the week. On Thursday, the HEADLINE INFLATION 4.30% 4.30% 4.10% 4.40%
BSP will report on April inflation with the numbers expected CORE INFLATION 3.40% 3.60% 3.40% 3.80%
to fall within the 3.7% to 4.7%, still comfortably within the BSP RP 6.25% 6.00% 6.25% 6.00%
government's official target band of 4.0% +/- 100 bps.
BSP RRP 4.25% 4.00% 4.25% 4.00%
Inflation has increasingly become a thorn on the sides of
Source: w w w .neda.gov.ph
global economies, both developed and emerging, primarily
impacted by rising commodity and oil prices. Year-to-date Philippine inflation averages 4.1%, following a similar 4.3% pace
in the last two months and 3.6% in January. Absent any surprises, the Monetary Board may be expected to hold back any
follow-through rate adjustments when it meets on the same day, May 5. Overnight borrowing and lending rates were
raised 25 basis points in the last meeting, a move that was seen as merely pre-emptive after tensions in the Middle East
escalated.

Globally, the rise in consumer prices is seen as “transitory,” and will pull back to “normal” levels when the MENA tensions
ease. Earlier, the European Central Bank (ECB) effected an upward tweak in the region's benchmark rates. The US
meanwhile, has raised its 2011 inflation forecast to between 2.1% and 2.8%, vis-a-vis its “long-term goal” of no more than
2.0% this year and further sliding to the 1.4% to 2.0% range next year.

The same pattern in the economic calendar is reflected in the US. Market-moving numbers are due to be reported
Thursday and Friday, with a “Bernanke speech” in Chicago in between. The Fed Chairman will speak before the 47 th Annual
Conference on Bank Stucture and Competition on the topic “Implementing a Macroprudential Approach to Supervision and
Regulation.” At its last meeting, the Fed held rates at current historic lows, alongside a pledge to stimulate the economy.
In the same breath, even as it affirmed that it will see through the completion of the $600 billion asset-purchase “QE2”
scheme, there were hints dropped that some tightening may be the order in the medium-term, maybe even sooner than
the six-month frame analysts and economists factor in. The termination of the asset program itself, upon the full utilization
of the alloted funds, represents an initial step towards a potential monetary policy shift.

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.
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 XVIII_May 2 to 6_TD 084-088
2 of 3

TECHNICAL CONDITION:
CATEGORY M EASURE VALUE PREVIOUS W EEK CHANGE% END-DEC2010 CHANGE%
ACTIVITY [YTD
NET VOLUM E 2,123,767,524 2,116,534,615 0.34% 1,637,867,112 29.67%
DAILY AVERAGES]
NET VALUE 4,440,862,016.46 4,454,995,858.27 -0.32% 4,603,800,556.27 -3.54%
ISSUES TRADED 171 172 -0.58% N/A N/A
TRADES 14,956 14,912 0.30% N/A N/A
FOREIGN (BUY) 2,117,381,387.31 2,115,155,863.57 0.11% 1,972,980,083.85 7.32%
FOREIGN (SELL) 1,980,271,373.81 1,987,462,640.46 -0.36% 1,752,691,290.38 12.98%
FOREIGN (NET) 137,110,013.50 127,693,223.11 7.37% 220,288,793.48 -37.76%
INDICATORS AD Line -454.00 -488.00 -6.97% -508.00 -10.63%
%K STO(14,3) 80.13 93.10 -13.93% 95.12 -15.76%
%D (STO(14,3,3) 82.73 94.25 -12.22% 72.13 14.69%
RSI(14) 68.26 72.04 -5.24% 56.61 20.57%
EM A(10) 4,277.85 4,222.95 1.30% 4,149.40 3.10%
EM A(50) 4,092.31 4,043.90 1.20% 4,119.42 -0.66%
EM A(150) 3,959.88 3,935.69 0.61% 3,839.39 3.14%
PHILIPPINE MARKET STATS
INDEX LAST WEEK% YTD% TRADING numbers after last week suggest either a sideways,
PSEI 4,319.51 1.05 2.82 consolidation bias or a further push north. This supports our initial
ALL 3,057.64 -1.76 1.70 contention that week 18 may see the market testing the 4,400-line.
FIN 955.89 1.34 -0.58
IND 7,414.04 1.30 2.68 Daily average volume and value turnover are still moving in
HDG 3,604.59 0.30 6.37 opposing directions. The former expanding a tad, the latter
PRO 1,611.56 -0.69 1.84 narrowing by an almost similar magnitude. This disparate
SVC 1,586.02 2.75 -0.28
movements between the number of shares and the amount of
M&O 16,385.29 1.20 17.48
money flowing through the market is indicative of either two things:
WORLD MARKETS
(1) last week's trades focused more on lower priced, bigger lot
INDEX LAST WEEK% YTD%
counters; or (2) stocks were sold off their recent highs. Given the
DOW 12,810.50 2.43 10.65
S&P 1,363.61 1.96 8.43
1.05% over-all rise in the index however, the first supposition is
NASDAQ 2,873.54 1.89 8.32 more credible. Refining this observation in consideration of the
FTSE 100 6,069.90 0.86 2.88 marginal change in both directions, we can surmise that (1) buying
DAX 7,514.46 3.00 8.68 focused on index-components while (2) selling was the more
CAC 40 4,106.92 2.11 7.94 predominant activity in off-index issues. The latter two points
MSCI APEX 50 928.90 -0.44 7.25 highlights another disparate movement – this time between the
TOPIX 851.85 1.15 -5.22 PSEI and the broader All Shares Index. Furthermore, there is an
NIKKEI 225 9,849.74 1.73 -3.71 increasing selectivity in the trades as the average number of issues
HANGSENG 23,720.80 -1.73 2.98 traded per session slipped by one (1) unit to 171, even as the
SHANGHAI 2,911.51 -3.29 3.68 number of trades increased by 0.30% over a 14pdMA.
TAIEX 9,007.87 0.43 0.39 ADL 2011

KOSPI 2,192.36 -0.25 6.89 200

S&P/ASX 200 4,823.20 -1.84 1.64

ALL ORDINARIES 4,899.00 -1.94 1.07

-100

NZ50 3,519.33 0.77 6.36

SET 1,093.56 -0.88 5.89 -300

JKCI 3,819.62 0.49 3.14 -400

BSESN 19,136.00 -2.38 -6.70 -500

Straits Times 3,179.86 -0.47 -0.32 -600

KLCI 1,534.95 0.71 1.06 -700

HO CHI MINH 480.08 5.18 -0.94 -800

The ADL lent support to the index' rise as it pushed to higher grounds, albeit still negative on a year-to-date. With the
index adding 1.05% on the week, the ADL rose nearly 7 percent! As the accompanying chart (above) bears out, the
market's “true” bottom occurred in mid-March when it closed at 3,817.38. It has been uphill since them, albeit we see that
the “true” top was reached roughly a month later at 4,227.99. Past that point, even as the PSEI continued to add 2.4% to
its highest close for the year at 4,331.37, the ADL has started to show a failure to support the advance. Having said that
however, the suggested pull-back may be a short-lived but healthy correction is welcome. The medium- to long-term view
is promising and supports our still bullish outlook over the same horizon.

In another encouraging statistic, foreign activity has sustained its positive trend, week-on-week. As the table above shows,
average daily foreign buying has increased while selling has decreased. More importantly, the pace of the latter is
significantly faster than the latter. In this light, we can say that the “measure” has become less negative, rather than more
positive – but, as mentioned, encouraging, nonetheless.

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.
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 XVIII_May 2 to 6_TD 084-088
3 of 3

Finally, the index chart above, highlights our lingering doubts on a sustained push north – from a pure technical standpoint.
The two momentum indicators included draw similar readings. Both have broken below their respective theoretical
overbought lines and are currently poised to make a reaction high above such line. Thus the market is still overbought and
ripe for a pullback. Such pullback signal will be generated if and when both or either of the two falls off the “reaction tops”
and continues past the overbought levels. Then we can expect the “correction” to occur. Nevertheless, our comfort zone
insofar as trend continuation is concerned is drawn to a low of 4,100, which we tag as the major support line that must
hold. Else, all bets are temporarily cancelled.

Yet, as we have mentioned at the lead of this report, we may see investors putting such technical warnings aside as they
trains sights on fundamental plays – earnings.

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.