MARKET ADVISORYHistorical References

MARKET ADVISORY
Historical References

[Top Picks] [News/Advisory] [ Links ][Contact]

March 26, 1999	March 12,1999	March 10,1999
March 9,1999	March 5, 1999	March 4, 1999
March 3,1999	February 25, 1999	February 22, 1999
February 2, 1999	January 2, 1999	December 10, 1998
December 4, 1998	November 25, 1998	November 24, 1998
November 17, 1998	November 15,1998	November 11, 1998
November 9, 1998	November 5, 1998	November 4, 1998

AFX : (03/26/99)
Manila Shares Close Higher on Bargain-hunting
Share prices closed higher on bargain-hunting after two days of declines, dealers said. However, they said gains will unlikely be sustained, with volume expected to be lighter ahead of the Easter break. The composite index closed up 22.80 points, or 1.1 pct, at 2,022.07 after moving in a range of 2,001.11-2,022.27 on volume of 2.0 B shares worth 992 M pesos. The All Shares index was up 5.33 points at 642.30. Advances led declines 55 to 31, with 51 stocks unchanged. The commercial-industrial index rose 22.09 to 2,827.63 points and property gained 10.51 to 813.02. Banking and financial services added 6.82 to 667.27 and mining rose 25.80 to 1,597.72. Oil was up 0.03 at 1.33. The peso closed the morning at an average of 38.741 to the dollar after trading in a range of 38.73-38.75. Volume totaled 31.5 M usd.

WEEK IN REVIEW
The Phisix ended the week slightly higher by 16 points to close at 2022 versus last week's 2006. The market has remained rangebound, between 1994 to 2047. The rally this week was led by PCI, SMPH, PNB, MBT, MER B, ION, JGS, FDC, ICT, and BPC. PCI rose by P38 to close at P213 as speculation rose on the possibility of the Lopez and Gokongwei groups divesting of their respective stakes in the bank. Bucking the trend were ALI, AC, CMP, PCOR, TEL, SMCA, and DGTL. The market began the week higher as the decline in domestic interest rates (benchmark 91-day T-bill at its lowest in almost two years) and the stable Peso boosted investor confidence. However, the gains for the week were almost erased as the rally in the DJIA was cut short midweek; the DJIA succumbed to selling pressure brought about by warnings on corporate earnings and tension in Yugoslavia. However, bargain hunting was apparent as the market reached its supports.

The Phisix is expected to trade sideways until investors get a better idea of how the economy and corporations performed in the first quarter. Although there are positive sentiments for an economic recovery this year, there has been no strong evidence to support this. While some investors have factored a weak first quarter, a good number have reserved judgement (opting to wait for actual results). This accounts for the current market neutrality.

( back )

First Pacific and NTT Finalizes Smart Sale Transaction

Nippon Telegraph & Telephone Corporation (NTT) announced that it will finalize the US$214M deal with First Pacific Co. Ltd. to raise its equity in Smart Telecommunications to 37%. Despite the fact that the transaction has been public for some time, the market may have taken the news in another light; connecting the done deal with the possibility of NTT's entry into Philippine Long Distance Telephone Company (PLDT). Holding firm Metro Pacific Corporation (MPC), the local flagship company of First Pacific plans to sel its shares in PLDT (after the share swap) to a foreign investor that would raise for the company additinal cash of P17 billion to P19 billion.

( back )

SUMMARY REPORT OF THE EXTERNAL TRADE PERFORMANCE FOR JANUARY 1999
TWO-WAY TRADE IN GOODS REACHES $4.976 BILLION

With higher export revenues, total merchandise trade for January 1999 grew by 0.5 percent to $4.976 billion from $4.953 billion a year earlier. This uptick comes after seven consecutive months of decline. Export receipts went up by 22.0 percent to $2.581 billion from $2.115 billion while import payments fell by 15.6 percent to $2.395 billion from $2.838 billion. The growth of exports is the highest since March 1998. The balance of trade in goods (BOT-G) was a surplus for the eight consecutive month at $186.0 million.

ELECTRONICS AND COMPONENTS TOP JANUARY IMPORTS

Accounting for almost 26.5 percent of the aggregate value of January 1999 imports, payments for Electronics and Components rose by 12.2 percent to $635.59 million from $566.38 million last year. Compared to December 1998, aggregate payments for the top import grew by 52.5 percent from $416.67 million. Telecommunication Equipment and Electrical Machinery ranked second with payments dropping by 31.8 percent to $195.39 million from $286.44 million last year. Industrial Machinery and Equipment was third with shipments declining by 32.3 percent to $174.78 million from $258.03 million a year ago.

Materials/Accessories Imported on Consignment Basis for the Manufacture of Other Electrical and Electronic Machinery and Equipment, valued at $173.46 million and accounting for 7.2 percent of the total, declined by 1.9 percent from $176.80 million last year. Mineral Fuels, Lubricants and Related Materials, valued at $135.02 million and 35.1 percent lower than $207.93 million last year, comprised the fifth biggest group of imports with a 5.6 percent share of total.
Office and EDP Machines dropped by 25.8 percent as payments amounted to $118.74 million from $159.99 million in 1998.

Other top imports for January 1999 were Cereals and Cereal Preparations,$84.66 million; Textile Yarn, Fabrics, Made Up Articles and Related Products, $77.85 million; Transport Equipment, $59.77 million; and Miscellaneous Manufactured Articles, $53.80 million. Payments for the top ten imports for the month amounted to $1.709 billion or 71.4 percent of the total.

CAPITAL GOODS ACCOUNT FOR 40.7 PERCENT

Year-on-year, payments for Capital Goods fell by 24.7 percent to $975.38 million from $1.295 billion a year earlier. Importation of this commodity group accounted for 40.7 percent of the total. Expenditures for Raw Materials and Intermediate Goods, the second major type of goods, was down by 5.7 percent to $966.83 million from $1.025 billion in 1998. Aggregate bill for Mineral Fuel and Lubricant, Consumer Goods and Special Transactions amounted to $452.74 million or 18.9 percent of the total imports.

US TOP SUPPLIER OF IMPORTED GOODS

The United States remained as the top supplier of imported goods valued at $531.15 million, which was 22.2 percent of the total import payment. Exports to the US market, on the other hand, yielded $758.91 million in receipts, resulting in a $227.76 million BOT-G surplus. Japan, accounting for 20.2 percent of the total bill, came out as the second biggest source of foreign-made commodities. Payments reached $484.18 million, which was an 8.0 percent decline from $526.50 million last year. Receipts from exports to Japan stood at $365.84 million, netting a $118.34 million BOT-G deficit.

Republic of Korea followed as the third biggest source of imports amounting to $182.26 million. Revenue from exports reached $67.70 million resulting in a $114.56 million trade deficit. Other major sources of imported commodities were Singapore, $133.41 million; China, $115.78 million; Hongkong, $106.30 million; Taiwan, $97.86 million; Germany, $72.66 million; Thailand, $70.58 million; and Malaysia, $59.34 million.

Other BOT-G surplus countries in the top ten were Singapore, Hongkong, Taiwan, and Malaysia.
Payments for imported products from the top ten import partners amounted to $1.852 billion or 77.3 percent of the total.

UNCOLLECTED DOCUMENTS

As of press time 110 out of 42,516 export documents and 101 out of 47,655
import documents are still expected from the ports.

--------------------------------------------------------------------------------
Source: National Statistics Office
Manila, Philippines

( back )

GDP Growth
Gross Domestic Product could grow 2.5 to 2.6 percent this year versus a 0.5 percent contraction last year, Economic Plannuing Secretary Felipe Medalla said Friday. "We think 2.5 to 2.6 GDP growth this year should be very easy to achieve, Medalla said at a meeting. at the same time the former dean of the University of the Philippines School of Economics said the Bangko Sentral ng Pilipinas should provide room for further monetary expansion to ensure that the country would meet its targets this year.

( back )

BPI Corporate Update: Ayala Land Inc. List New Shares
Ayala Land Inc. (ALI) will list 205.9 million new shares to cover the private placement transaction of Ayala Corporation effected last year. The listing of the common shares is set for Thursday next week. The current weakness in ALI share price has been attributed to the prospective earnings dilution from the listing of these new shares; however, as these shares have already been previously issued (in the private placement last year), any dilutive effect should have been discounted by investors. This current weakness in share prices is seen as temporary and should be taken as an opportunity for acquisition. BUY.

( back )

PDI : (03/09/99)
Inflation falling to 7.5%
The government said it sees inflation falling to 7.5% by the end of 1999 and its interest rate policy continuing to "lean against exchange market pressures." The government gave the forecasts in a Jan. 20, 1999 memorandum on economic and financial policies approved by the International Monetary Fund and released by the Bangko Sentral the other day. Besides projecting annual inflation to drop to 7.5% by the end of the year, the government also forecast the average inflation rate for the year to range from 8.5 to 9%, according to the document. The country's inflation rate slid to 9.9% in February from a peak of 11.6% in January, marking the first time the rate had fallen into single digits since October 1998.

AFX : (03/09/99)
Share prices closed lower on profit-taking after Monday's gains, with the uncertain economic outlook prompting investors to take a sell-on-strength strategy, dealers said. The composite index closed down 29.87 points, or 1.5%, at 1,998.41, off a low of 1,987.65, on volume of 590 mln shares worth P1.01 B. The All Shares index was down 8.56 points at 631.23. Declines led advances 60 to 22, with 41 stocks unchanged. The C-I index fell 47.87 to 2,794.97 points, while property lost 9.38 to 821.34. Banking and financial services dropped 8.18 to 631.26, while mining rose 31.38 to 1,673.25. Oil was unchanged at 1.26. The peso ended the morning at an average of 38.885 to the dollar after trading between 38.83 and 38.98. Volume totaled US$87.0 M.

BW : (03/09/99)
The Social Security System's recent purchase of 250 M share in diversified firm Metro Pacific Corp. is a sound and stable one as it is based on afundamental and technical study, its top official said. "All our investments are based on a fundamental basis meaning we look at the sound value of the stock, cash flows, projected earnings, the kind of industry, competency of the management. So, it is a thorough and complete study of a company as we are given the low down on the company," SSS president and chairman Carlos Arellano said in an interview. Last Friday, First Pacific Co., Ltd. said Metro Pacific has placed 400 M new shares at P1.80 each to the SSS and the Government Service Insurance System for a total of P720 M. The shares represent about 2.3% of Metro Pacific's enlarged capital and raises the two government investment arms' stake in the firm to 4.7%. Mr. Arellano said the institution's investments have to pass through a series of committee approvals before it can invest on stock issues.

SSS says stake in Metro Pacific a long-term strategy (cont.) "We bought shares of Metro Pacific as part of our long-term investment strategy given its fundamental and long-term prospects and its numerous investments like its controlling block in the Philippine Long Distance Telephone Co., Bonifacio Land Corp., Smart Communications and investments in Piltel," he said.

TDY : (03/08/99)
The Securities and Exchange Commission (SEC) will dig deeper into the financial difficulties being encountered by Pilipino Telephone Corp. (Piltel) and will look into possible misrepresentations committed by its previous owners. This developed as SEC chairman Perfecto Yasay warned the management of publicly held companies to disclose its financial health to give investors a "true picture" of the company's health to aid them in their investment choices. Yasay told reporters over the weekend that Piltel's management can be held liable for the damage caused to the investing public by the company's current financial mess. Yasay also said the SEC will look into possible misrepresentations committed by Piltel's previous management when it sold out its interest to Hong Kong's First Pacific Co. Ltd.

Under full disclosure rules, a publicly listed company is required to fully disclose major and material information particularly about the financial condition of the companies. He said investors use the disclosures as the basis of their decision to invest or not into a publicly listed company. Analysts and investors were surprised when Piltel announced a P4.12 B loss last year, a whopping 565% higher than the P620 M loss it incurred in 1997. They were also stunned when Piltel's financial obligations swelled to P34.9 B resulting to a default after a portion of its loans fell due. The company is now holding a series of discussions for the possible restructuring of its loans. In November last year First Pacific spent P30 B to acquire a 17.2% interest in PLDT by buying out the interest of former chairman Antonio Cojuangco, taipan Alfonso Yuchengco and the Ongsiako family.

( back )

Philippine Stockmarket Business & Economy Discussion List : March 5

At 9:00 AM today, March 5, the Office came out with the FEBRUARY 1999 figures for the CPI and the INFLATION RATE. (The same was also posted at the NSO website an hour later.) The estimates are now computed using1994 as the base year. The new series pegged the inflation rate in FEBRUARY at 9.9 percent. This is much lower than the 11.5 percent revised inflation rate posted in January.

( back )

BW/TDY : March 4, 1999
Ayala Corp.Sets New Share Class

The management of Ayala Corp. recently approved the creation of a new class of shares which will serve as the conglomerate's "fund-raising vehicle" for equity offerings to the international investment community. To be called Common X shares, the new class of shares will have a par value of P10 B. The company's board has also approved the increase in Ayala's authorized capital stock to P20 B from P17 B to accommodate the creation of the new shares. A source from a local brokerage house said yesterday that the Common X shares are intended to increase the price of AC shares since the new shares will be offered for conversion. "The price of Ayala shares will eventually go up since the existing common shares will be diluted after everybody has converted. Ayala shares will then become attractive to foreign investors who are on the lookout for blue chip stocks," the source said.

Having a par value 10 times greater than that of the common shares, the Common X share dividends and pre-emptive rights will also be proportionately larger than the common shares. Each Common X share will carry the same vote as the existing common share. The management said market conditions and Ayala's financing needs will dictate the timetable for the issuance of the new shares.

The board of directors of the Ayala Corp. approved at their meeting yesterday the company's declaration of 20% stock dividend to its common stockholders and the creation of a new class of shares to be called Common X shares. The stock dividend, to be paid out from the authorized but unissued common shares, will have a record date of May 14 and payment date of June 23. The payment of the stock dividend will be in keeping with the rules of the SEC and the PSE. The board believes that the Common X shares will give the company the flexibility over the long term to raise additional equity capital from the international investment community, the company said in a statement.

The current economic situation has created significant opportunities for those with access to capital resources. The company intends to position itself to be able to take advantage of opportunities that may arise in the near future.

Ayala continues to develop innovative financial structures to be able to take advantage of the capital market opportunities while balancing the interests of all its stakeholders. Ayala was the first Philippine company to issue an international exchangeable note and to list a convertible preferred share in the PSE. Similar to the instruments that have served the interests of debt and equity holders, the common X shares seek to address the demand of Common and Common X shareholders. Going forward, the board expects the Common X shares to be used as the primary fundraising vehicle for equity offerings by Ayala Corp.

( back )

PDI : March 3, 1999
Petron Still Dominates Oil Market

OIL giants led by Petron Corp. continued to defend their respective market shares last year against the new players in an industry that bore the ill-effects of the economic slowdown and the crisis that hit Philippine Airlines. Data from the Petroleum Institute of the Philippines Inc. showed that Petron ended 1998 with a 39.8% share of the overall market, although this was slightly down from 40.3% the year before. Rey Marquez, executive director of the petroleum institute, said total petroleum sales last year had dropped by 2.4% to 137.7 M barrels from 141.1 M barrels in 1997. The oil majors accounted for 131.7 M barrels from a combined sales of 136.4 M barrels the year before. Marquez said petroleum sales, like other basic commodities, were affected by the economic slowdown and the temporary shutdown of the flag carrier.

Also contributing to the overall decline was the lower demand for diesel by 2.5% or 1.1 M barrels, fuel oil by 2.9% or 1.48 M barrels. On a per product basis, Marquez said, gasoline consumption increased by 3.3% or by 563,000 barrels while demand for unleaded improved last year against leaded premium. He said LPG consumption grew by 7.7% or 763,000 barrels even with a decline in product sales. Even the power generation sector reduced its purchases last year by 8.5% from 33.5 M barrels in 1997. National Power Corp. continued to be the biggest buyer of fuels for its power plants. Fuel oil, which is used by Napocor to run most of its power turbines, was the most consumed product accounting for 35.6% of total demand.

( back )

BW : February 25, 1999
Metro Pacific Finalizes Smart Stake Sale to PLDT

Metro Pacific Corp. officially announced the planned sale of "its remaining stake" in Smart Communications, Inc. to dominant carrier Philippine Long Distance Telephone Co. In an investors' briefing held yesterday, MPC chief finance officer Ian Wilson told analysts that the company will finalize the sale of its 37% shareholdings in Smart in exchange for PLDT shares. "Since they're (MPC) expected to sell a portion of their Smart shares to Nippon Telegraph, they said their next move will be to divest the rest to PLDT," an analyst from a foreign brokerage house said yesterday. Last Friday, the board of directors of Japanese telecommunications from Nippon Telegraph and Telephone Corp. approved the increase in shareholdings in Smart to 37% from 15%. NTT is expecting to finalize the said transaction by March.

The Japanese firm will pay approximately P8.3 B for a combination of new shares issued by Smart worth P2.5 B, existing shares from MPC worth P1.6 B and those of First Pacific affiliates worth P4.2 B. If MPC will successfully divest its remaining stake in Smart, PLDT will eventually own 60% of the cellular company, the source said. According to MPC officials, after acquiring PLDT shares from the share swap, the company will immediately sell the shares to parent firm First Pacific Co. Ltd. of Hong Kong, "They want to sell the shares right away to First Pacific in order to get cash for MPC's property ventures," the source added. First Pacific presently holds 17.2% controlling stake in PLDT. The foreign firm earlier expressed interest in increasing its existing stake in the local telecoms giant. Aside from the divestment in Smart, MPC officials said the company is not expecting a lot of corporate actions this year.

( back )

TDY : February 23,1999
Metro Pacific to earn P2.8 Billion

Diversified conglomerate Metro Pacific Corp., (MPC) a unit of First Pacific Co. Ltd. of Hong Kong, expects to post a one-time gain of about P2.8 B this year from the cut in its interest in cellular phone giant Smart Communications Inc. to 38% from 52%. In a statement, MPC announced that the BOD of Nippon Telegraph and Telephone Corp. of Japan has approved the proposed increase of their holdings in Smart Communications to 37% from 15%. With that, the holdings of First Pacific will be reduced to 18% from 32%. "The transaction includes all the principal shareholders converting all outstanding bonds into a new common shares, giving raise to a gain on dilution for MPC," the company said. NTTC will spend P8.3 B to acquire additional shares in Smart Communications and the shares owned by MPC. MPC will sell P1.6 B worth of shares, while its parent firm First Pacific will sell P4.2 B. Metro Pacific to earn P2.8 B.

It will acquire additional P2.5 B worth of new shares in Smart Communications. With the issuance of new shares to the Japanese company, the market value of Smart Communications will be raised to P36.9 B from P34.3 B. MPC reduced its indebtedness over the course of the year with its consolidated debt down 40% to P48.3 B, while its interest-bearing debts are down 46% to P30.5 B. "Debt reduction - one of management's major objectives at the start of last year - was achieved by deconsolidating Smart's balance sheet, in anticipation of Metro Pacific selling a portion of its interest in Smart to NTT." the company said. Smart Communications continued to dominate the cellular phone market with a market share of 50% and a subscriber base of 791,000 last year.

( back )

PSE : February 2, 1999
The Financial Highlights of Metropolitan Bank and Trust Company

Based on the unaudited balances as of and for the year ended

December 31, 1998:
Net Income P4.707 bln
Provision for loans and other losses P2.004 bln.
December 31, 1998:
Total Assets P270.356 billion
Gross Loan Portfolio 146.494 billion (excluding interbank loans receivable)
Allowance for Probable Loan Losses (5.105 billion)
Unearned Discount (0.338 billion)
Net Loan Portfolio P 141,051 billion (excluding interbank loans receivable)
Deposit Liabilities 198.224 billion
Bills Payable 14.689 billion
Capital Funds 41.169 billion
Net Income 4.707 billion

( back )

MARKET ADVISORY
January 2, 1999

Share prices closed stronger on last minute year-end buying in the blue chips led by San Miguel, Meralco and Ayala Corp. Porofolio managers took positions in anticipation of economic and corporate rebound for 1999. The sudden runup was also due to window dressing and was really expected as the market marked the last days of trade for the year 1998. This upturn may also indicate investors positioning ahead of the likely recovery. A general perception of recovery in the region, the Philippines eluding recession and the various economic ills brought about by the onslaught of the economic turmoil has renewed investor optimism.

The composite index closed up at 1,968.78 or 35.8 points higher after being confined to a narrow range. Chart indicators points to a fair chance of a good rally although resistance is very strong at 2,000 level. If it rallies on a stong volume then its 2,500. In the short term, next week will be critical however. A bearish double top formation is at hand if we cannot breach 1,980 and the market closes on declining volume. Watch out for the foriegn brokers once they start going out of the market.

( back )

MARKET ADVISORY
December 10, 1998

We have good news and we have bad news. First the bad news. The market hasn’t done anything exciting in the last trading days, and the rest of December could see little activity beyond what we’ve seen. The good news is, the Phisix has not broken below our Maginot Line at 1760, which could be telling us that the consolidation taking place may be accumulation driven. Better times are expected for the month of January up until the end of the first quarter if only because of improved macroeconomic fundamentals. Load up on the following stocks.

SECTION 2

BANK OF THE PHILIPPINE ISLANDS. Time will vindicate the faith of those who invest in the country’s foremost financial institution. Market inefficiency has kept the stock underperforming other banking issues such as PNB and MBT, but far and away the more sensible investment.

AYALA LAND. Back to 10 pesos. An excellent stock for long term investors and short term punters. Large float is not a problem everytime the stock moves. Short term resistance is at P11.25, medium term resistance at P12.50, that’s good enough for a 25% return.

PETRON CORP. Trading at support, if it falls below 4.00, then the next sensible price to come in would be 3.75. Do not be misled be drops in the prices of fuel, the prices of crude in the world markets has drop a lot more ( much more ) than the implemented price roll back, so in effect, profitability has not suffered, and probably even improved.

( back )

MARKET ADVISORY
December 4, 1998

The Phisix’s drop to 1800 was swift and violent, something we had not seen since November 10, when the market went from 1800 to 1637 in three days. The question on everybody’s mind is, has the "correction" been enough? There’s reason to believe that we could get a rally today, if only because the area between 1770 and 1800 constitutes strong support. Inflation figures for the month of November is due out today, and we don’t expect it to be any worse than the previous month’s. If the market does the unexpected, which is break below 1770, then we could see it continuing downwards until 1680. Medium to long term scenario remains the same, market’s in for better times until February of 1999.

SECTION 2

METRO PACIFIC CORP. Has, literally, turned itself into a real, true blue chip stock overnight. Used to be only a pseudo heavyweight. The stock may be burdened by its affiliation with Salim, and a relatively high leverage ratio, but having controlling interests of one of the five biggest capitalized companies in the country, and the one with the highest profit growth of the big five certainly catapulted MPC to the big leagues. Trading at support, a definite buy.

AYALA LAND. A 23% fall form its high back on November 24 has made the stock real attractive from a trading standpoint. The company’s income for the first nine months of the year did drop 40% from that of last year’s, but the stock has never gone out of favor among investors looking for real corporate gems. Has also gone to support, if it does breach 10.00, then it looks like the next pick up price would be 9 pesos.

MERALCO B. Only a few pesos away from support of 100. A blue chip that trades like a second line, even third line stock. A buy at this point. Well-run utilities such as Meralco are almost assured of regaining lost ground.

FILINVEST LAND. Good strong support at 2.60, which it, for all intents and purposes touched yesterday, also traded 48M shares yesterday, being property related won’t help its profit prospects this year, but the stock has performed regardless of reported earnings, should be able to do it again.

( back )

MARKET ADVISORY
November 25, 1998

Next resistance for the Phisix is 1970, then 2060, and then 2150. The market still looks extremely strong. Blue chips such as AC, ALI, PCOR, SMC and PNB have appreciated at a steady, if unspectacular, rate, making the rallies easier to sustain. Keep this in mind, if the market is eventually going to hit 2150, then its going to take significant moves from the heavyweights.

SECTION 2

METRO PACIFIC CORP. Still a buy, MPC’s denial notwithstanding. First Pacific and Metro Pacific is, for all intents and purposes, one entity. The buy-in into PLDT looks more and more a reality with each passing day. Just to give an idea how significant this potential acquisition is going to be, even just a fourth of PLDT’s annual net income represents three times the consolidated earnings of MPC based on 1997 figures.

AYALA CORP. Has been consolidating between P10.50 and P11.25 over the last seven days. Looks like its getting ready to test the initial resistance level of P12.25 in the coming days. Has every reason to be priced higher than ALI, based on Book Value and recent financial performance, its not, which in that sense, makes it a good buy.

ASIAN TERMINALS. Traded 6M shares last Friday. Has not had the kind of price movement we’ve been seeing in virtually every second line stocks in our recent rally, partly because of small float. Could conceivably go up to P1.30.

EEI CORP. Income for the first nine months of the year grew by 51%, an incredible achievement given the kind of earnings contractions we’ve seen in property related companies in the last two quarters of the year. Looks ready to go up to P1.50.

( back )

MARKET ADVISORY
November 24, 1998

The Phisix rallied on a good surge of volume yesterday. We are seeing volume rise on the right side of the right shoulder of a reverse head and shoulder. The resistance at 1860 that defines the bear market has been hurdled. Are we in for a long term reversal? Encouraging sign....personally, yesterday looks like a strong confirmation. We are seeing the market will go to 2500 level between now and approximately middle of February.

Suggested strategy:

Take up positions in blue chips like AC, TEL, BPI, PCOR, BPC, SMC, etc...

( back )

MARKET ADVISORY
November 17, 1998

As with the last five trading days, the market and the majority of stocks will follow where PLDT and MPC goes. A word of caution for those trading MPC, do not buy it because you’re expecting them to bag the PLDT deal, buy it and trade it for quick, small profits. There are too many unknowns and it seems nobody has any idea what’s going on, not even the major dailies. Our feeling is, nothing will be known until perhaps two weeks from now, because the guys pulling the strings have not made enough money yet. One of our short term resistances used to be 1820, today, because we’ve made four unsuccessful attempts, another one has been established at 1770. Oh, this just in, PNB reported losses amounting to P500M for the third quarter of 1998, and Metro Pacific said that profits for the first nine months of 1998 was P172M, a drop of 70% from last year’s P700M.

SECTION 2

JG SUMMIT. Good support at 1.46. Traded 7.6M shares yesterday, huge spike. Company stands to earn about P3B this year. Underperforming subsidiary is DGTL, which saw revenues go up almost 100%, but has net income contract by 30%. If the stock falls below P1.46, liquidate the position right away.

ABOITIZ EQUITY VENTURES. One of our favorites. Stock has lagged behind the Phisix, but make no mistake, Cebu-based holding company remains one of the most financially healthy in the PSE. A investment in this stock certainly requires a little more patience than say BEL and MPC, but it’s worth it.

SAN MIGUEL CORP. Received P24B from its sale of Nestle. Interest income on that amount alone at 10% per annum will be more than double the income Nestle would’ve contributed to SMC bottomline for the whole year of 1998. Company’s finally headed somewhere after 12 years of floundering in open water.

( back )

MARKET ADVISORY
November 15, 1998

There has been consolidation in the 1700 to 1750 level for the past week and a flag formation pattern has occurred. This can be a precursor to a strong take off. Next resistance is at 1800 and when breached could bring us to the 1860 the neckline of a reverse head and shoulder pattern. This is a very strong resistannce however. When this is breached we will be looking at 2100 the next target. Traders should watch these two points 1700 to 1860. Over a period of maybe 2-3 weeks we could seeing the market bounce up and down this level so take advatage, be quick and nimble. Take profits while you can get back in at the right level, take more profits.

We are expecting some likely positive news and development this coming week. Already we are seeing an even stronger peso with strong fundamentals backing it up. US$5.6B is expected to come in the country before the year ends 2B from OCW's, 1B from the Miyazawa fund, 591M from San Miguel sale of Nestle, 450M direct foriegn investment, 385M from sale of PLDT and PAL equities, a total of 410M from IMF, 220M from other sources of funding. A strong peso is good news for the stock market.

A US interest rate cut will bring positive sentiment in the market. Againts the backdrop of the Asian and global financial crisis, APEC leaders would strive to hash out differences and make the best of the meeting. A lot things happening this week so be on the lookout and be ready.

( back )

MARKET ADVISORY
November 11, 1998

The Phisix is at a crossroads. The close last Monday puts us squarely at support, which could have served as a launching pad for a takeoff to 1860. However, it did not happen, we could be on our way to 1600. A drop to 1600 will put the market’s strength to a severe test, and if the market fails that test, then its 1450. The development that could make or break the market would be soon-to-be-released GDP and GNP numbers, 0 to positive growth for GDP is good, negative growth is bad. Several stocks may see intra day rebounds if only because of the support from people who bought at much higher prices, exploit them. If you’re going to have to run naked in biting weather, make sure its only for a short distance.

SECTION 2

BANK OF THE PHIL. ISLAND. Trading at support. Has formed a fairly bullish pattern called the flag. Excellent financial health. One of the drawbacks is the pace at which is appreciates, certainly not for those use to wheeling and dealing for the short term profit. A break below yesterday’s close could take it as low as 70.

UNIVERSAL ROBINA CORP. Another stock that has found short term support at yesterday’s close. Usually is capable of going up to 3.50 in a very short amount of time, but for those who go in today, and subsequently see a drop in prices, might as well cut the loss early, and get back in when next support of 2.60 is hit.

ABOITIZ EQUITY VENTURES. Recurring income for the first nine months of the year was in excess of P820M, a 28% rise from last year’s nine month earnings, that’s one of the highest growth rates in the PSE. A buy at 1.24.

( back )

MARKET ADVISORY
November 9, 1998

The one thing the Phisix has shown over the last three weeks is resiliency. Time and again the market has bounced back strongly from a selldown, it did it on October 21, again on October 28, and it did it again November 5. Enough momentum may have been built up for the Phisix to rocket to 1800. A bullish reverse head and shoulders pattern has been established, however, confirmation of a sustained rally is not given until the neckline is broken, and that neckline is pegged at 1860. Poor corporate earnings on the part of property companies may temper the surges we’ve experienced, but a possible improvement on GDP and GNP figures from last quarter may act as a counter balance. Best strategy remains the same, trade the market and do not be shy to take out profits, it may turn out to be your best move.

SECTION 2

JG SUMMIT. Trading at support, short term target is 1.84 on the upside. If it falls below 1.60, it will not stop dropping until it hits 1.50. Company’s income is expected to at least double by the end of the year.

ABOITIZ EQUITY VENTURES. Another company whose quarterly financial performance gets better and better. Strongly advise people to accumulate on this stock because a corporations experiencing more than a 15% growth on earnings year on year is a rare and valuable commodity these days.

ROBINSON’S LAND. Will see earnings growth accelerate towards the end of the year because the holidays usually bring hordes of shoppers into the malls, which happens to be the company’s bread and butter. Another stock that you position in, in anticipation of good earnings results.

( back )

MARKET ADVISORY
November 5, 1998

This time, there was no comeback. The Phisix did two things right yesterday. One, it fell more than 4%, which will bring emotions back into equilibrium, and two, it bounced from 1700 and closed 14 points higher than the low. 1700 (or more precisely, 1680) is an important support level, if the Phisix manages to post gains today, then we have a confirmed reverse head and shoulders, a bullish pattern that could foretell a rally to 2100. The Phisix is in no danger of making a complete reversal of our recent rally unless we break below 1600. Again, property companies will be reporting contracting earnings, get out while you still can. Traders are advised against getting too cocky, the minute guys start thinking they’ve got it all figured out, that’s when they get their clocks cleaned. Get in the market, prepare to take out short term profits, but be ready to cut losses.

SECTION 2

METRO PACIFIC. Good support at 1.50. Price is still inexpensive because of improvements in valuations due to PLDT. For the short term however, the price has to stay above 1.50, if that support line is breached, we are looking at a drop to 1.32 and then 1.20. Stock will get some buying support from people who bought yesterday and the day before, and you are advised to take advantage of their push.

AYALA CORP. Good short term support at 9.70. If that line is violated, the stock could drop quickly to 8.90. Company’s nine month net income up by 1%, that’s extremely good if your biggest subsidiary just reported that earnings contracted by 45% on a year to year comparison, which is exactly what happened. Medium term outlook looks impressive, no reason why the stock should not hit 14.00 by the end of the year, short term volatility is the challenge.

ABOITIZ EQUITY VENTURES. After jumping 40% in value, sort of took a rest. The reason, The stock is not your typical traders’ stock, not a lot of liquidity, not a lot of action, very little volatility. However, if you want a stocks with a solid corporations backing them up, then AEV is one of them. Year on year income is projected to go up by 20%, and the company core businesses of financial services and power generation ensures a steady and predictable stream of revenues year after year.

RFM CORP. Large conglomerate. Subsidiaries with household names. Makes money directly from consumer spending. Poor stock performance. Sometimes, the big returns are not made from trading hyperactive stocks, rather, their made by sifting through the garbage that nobody wants, and finding the diamond somebody threw out because the guy simply did know the difference between a real gem with a little bit of dust and a piece of rock.

METRO PACIFIC CORP. Still a cheap stock simply because of its recent coup. Acquisition of PLDT is one of the more important corporate events of the decade, and MPC just happened in the right place at the right time.

( back )

MARKET ADVISORY
November 4, 1998

The Comeback Kid strikes again. Just when the Phisix looked down and out at 10AM yesterday, having completely wiped out an early 60 point gain, and hovering around ten points lower than Friday’s close, the market staged a remarkable turnaround to close 46 points higher to end the day at 1801. One resistance has been broken after another, and we could very well see the Phisix attack the 1900 level within the next two days. The one concern that we have is that the last 7 days of trading has not exactly shown any sensible investing on the part of the money that’s come in, whereas two months ago companies good or bad took terrible hits, this time, companies good or bad look absolutely golden. The fear of being left behind is the one thing that’s making people empty their pockets to but stocks, and the cyclical nature of the stock market tells us that sooner or later, the money is going to run out. Trade the market, get in and out, and do not become too greedy.

SECTION 2

SAN MIGUEL CORP. Revenues for the first nine months of the year is up 22%, operating income is likewise up by 15%, the first time good news came out of a SMC Investor’s Briefing in a long time. The holidays usually see increased consumption on food and beverages, and this Christmas, SMC won’t have to act like Santa Claus and hand back most of their income to their bankers.