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GF EC-058B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City, PHILIPPINES 1605 (632)687-5071 (trunk)
DAILY REVIEW & OUTLOOK_ TD028-29_February 9-10, 2011
PSE Index Pts Change % Change Volume (m) Value (phpm) Advancers Decliners Unchanged
3,843.37 -35.11 -0.91% 1,295.53 5,991.14 38 91 41
The domestic economy remains stable, with a review of the macroeconomic targets set for Friday. Inflation is
still within official target range, although there are heightened concerns of increased upward pressure resulting
from a series of increases in oil and gas prices and transport-related fees.
The political front, however is beginning to brew as more and more “secrets” are uncovered during Congressional
investigations of the Garcia plea-bargain and the AFP's “pabaon” and “pasalubong” system. This took a drastic
turn with the alleged suicide of Secretary Angelo Reyes coinciding with the first birthday of President Aquino in
office. Nevertheless, the President's ratings has thus far remained “unaffected” despite the many “crisis” that
visited his young administration has been through.
Markets across the Asian continent were all in the red, owing the the growing “China crisis.” Stepped up
inflation will force the hands of the PBOC to further restrict money flow and credit, adding to fears demand from
the economy that has been the biggest buyer over the recession period, may slow. Commodity prices fell. China
likewise has been the major destination of mined ore and resources as it feeds the demands of a rapidly expanding
economy. The Chinese economy grew 10.1% last year.
The sell-off was evident across all sectors, which turned out losses for the day. The broader All Share Index
gave up half of the Main Index' losses, percentage-wise pointing to the heavy concentration of liquidation among
index-components. Between 2 and 3 stocks fell for each one that gained. Further highlighting the resurgence of
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.
DAILY Report Page 1 of 4, just sl
ACCORD CAPITAL EQUITIES CORPORATION
GF EC-058B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City, PHILIPPINES 1605 (632)687-5071 (trunk)
DAILY REVIEW & OUTLOOK_ TD028-29_February 9-10, 2011
PSE Index Pts Change % Change Volume (m) Value (phpm) Advancers Decliners Unchanged
3,843.37 -35.11 -0.91% 1,295.53 5,991.14 38 91 41
a pessimistic mood, value turnover exceeded the year-to-date daily average, reaching php5.991 billion.
WE have in previous reports, drawn a parallel between the weak starts this year and last. To reiterate the
point, last year, 2010, the market started off with the bear's pawing, which we saw as a normal reaction to a
record 63% gains in 2009. It was reasonable for investors to secure their profits as the uncertainties of the
then new year rolled in. These uncertainties came from both the political and economic fronts. On the political
spectrum, the country was then gearing up for a presidential election and at least until the actual exercise in
May, there were doubts if the polling will take place at all. There were other consequential “indeterminables”
not uncommon in Philippine political exercises. From the economic side, there were questions of whether the
extreme bullishness of the market was reasonable, particularly as the full year GDP for 2009 barely registered
growth. There were, understandably, concerns the economy may not be strong enough to continually resist the hard
pull of the then gnawing global recession. Of course, 2010 put all those doubts to rest as early as the first
quarter. Needless to say, the proof did not come easy as there were intermittent challenges to the global
recovery.
For this year, we had propositioned at the outset that the market may start off weak. Again, the usual
uncertainties over a new year and the deflation of the excesses of the closing (window-dressing) trades of the
prior year were principal factors. The major concerns
entering 2011 were the ability of the over-all economy ADL 2011
to sustain an above 7.0% GDP growth, absent a 150
consumption and spending-heavy election element in the 100
equation. In addition thereto, Europe was continuing to 50
0
struggle to keep its Union, and the euro, viable n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
1-Ja
3-Ja
5-Ja
7-Ja
9-Ja
1-Ja
3-Ja
5-Ja
7-Ja
9-Ja
1-Ja
b
b
b
b
-Ja
-Ja
-Ja
-Ja
e
e
e
e
-F
-F
-F
-F
-50
3
5
7
9
2
4
6
8
1
1
1
1
2
2
2
2
2
3
following the failures of Greece and Ireland. And of -100
0
n
n
n
n
n
n
n
n
n
n
n
n
n
n
0-Ja
2-Ja
4-Ja
6-Ja
8-Ja
0-Ja
2-Ja
4-Ja
6-Ja
8-Ja
0-Ja
b
b
b
b
b
-Ja
-Ja
-Ja
e
e
e
e
e
-F
-F
-F
-F
-F
First, the ADL draws a generally similar trend for both
4
6
8
1
3
5
7
9
-100
1
1
1
1
1
2
2
2
2
years as seen the twin charts to the right. The 2011 -200
3
trend looks better but only in the sense that there is -300
waiting for more cues. In contrast the 2010 line has -600
b
b
b
b
e
e
e
e
2-F
4-F
6-F
8-F
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.
DAILY Report Page 2 of 4, just sl
ACCORD CAPITAL EQUITIES CORPORATION
GF EC-058B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City, PHILIPPINES 1605 (632)687-5071 (trunk)
DAILY REVIEW & OUTLOOK_ TD028-29_February 9-10, 2011
PSE Index Pts Change % Change Volume (m) Value (phpm) Advancers Decliners Unchanged
3,843.37 -35.11 -0.91% 1,295.53 5,991.14 38 91 41
Second, the widely-tracked and influential flow of foreign funds (bottom chart, above) is clearly not
encouraging, to-date. As of Wednesday's trades, foreigners have accumulated a net sell value of php6.602
billion, a complete reversal of their net buying position of php3.425 billion a year-ago. February alone has
accounted for php2.436 billion or nearly one-third of the year-to-date total, with still two weeks in the
balance. This serves as another “depressant” for a larger segment of the “retail” market.
Average daily volume and value-turnover for the same year-on-year comparison (first 28 sessions) have doubled
from 1.376 billion to 2.867 billion and from php2.628 billion to php4.615 billion, respectively. This supports
the earlier observation we made with the ADL, the increased activity, volume and value are negatively biased.
The slight promising ray we found on the charts just yesterday faded back with the lines failing to sustain what
was seemingly developing shift to positive. Nevertheless, it proffers yet another potential positive – index
forms a “falling wedge” (drawn as the main downtrend from November, with the reaction highs defined by the dotted
-line) – a theoretically bullish reversal pattern. Yet, forming only over the last three to four weeks, the
pattern is “weak” and may be prone to false signals. Viewed another way, the bigger “falling wedge” with the
reaction highs defined by the heavy line above, suggests that the situation may still get worse before it makes a
turn with the timing defined as three- to six-months down the line. On this basis, the near term action remains
negative, as we wait for another low that should fall below 3,830. We thus place the major support at 3,730 with
a possible trading band extending to 3,620. The recent actions of the other three indicators are annotated in
their respective charts.
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.
DAILY Report Page 3 of 4, just sl
ACCORD CAPITAL EQUITIES CORPORATION
GF EC-058B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City, PHILIPPINES 1605 (632)687-5071 (trunk)
DAILY REVIEW & OUTLOOK_ TD028-29_February 9-10, 2011
PSE Index Pts Change % Change Volume (m) Value (phpm) Advancers Decliners Unchanged
3,843.37 -35.11 -0.91% 1,295.53 5,991.14 38 91 41
DISCLOSURES HIGHLIGHTS:
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.
DAILY Report Page 4 of 4, just sl