ACCORD CAPITAL EQUITIES CORPORATION

GF EC-058B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City, PHILIPPINES 1605 (632)687-5071 (trunk)
DAILY REPORT & OUTLOOK_for December 3, 2010
PSE Index Pts Change % Change Total Volume Total Value Advancers Decliners Unchanged
4,148.90 146.02 3.65% 1.452B Php7.868B 103 31 39

Daily Wrap::

LOCAL shares extended its run to a second session buoyed by a

resurgence of confidence both in Europe and the US. The PSE
Index climbed nearly 60 points off the opening bell and hardly
looked back, breaking past the 100-point mark by mid-session.
With more than three (3) stocks rising for each one that fell,
there were no sustained interruption in the day's trend that at
close, the measure booked gains of 146.02 points or 3.65%,
restoring the index above the 4,100-line, barely touching
resistance (4,150) and, consequently, strengthened the 3,970-
support. Including the previous session's 49.18 points surprise,
the market has recovered over three-fourths of the losses
sustained over a 6-day slump. Alternatively, we now lie just 54.7
points or 1.32% under the most recent top of 4,203.60
(November 19, 2010.) see chart
The advance was broad-based, as evidenced by the earlier cited daily breadth. Five of the top ten price gainers were “unheralded”,
mostly illiquid counters. The other half included a couple of Main Index and sub-index components . The list was topped by Holcim
Philippines, Inc [pse: HLCM] which rose 15.71% to php16.20 a piece. The Company's last material disclosure concerns the reopening of
its production facility in Mindanao in August, following a 5-month closure. As with most other listed firms, the Comapny's interim EPS
to September had already passed its full year 2009 result. Liesure and Resorts World Corporation [pse: LR, php2.95, +10.07%], Belle
Corporation [pse: BEL php3.60, +8.11%], SM Investments Corporation [pse: SM, php549.00, +7.65%] and Aboitiz Power Corporation
[pse: AP, php35.80, +7.51%] round up the five liquid counters in the list.
All sectors were in the green, all booking over 2.0% gains led by a hefty 6.18% by Holding Firms, or a little over twice the broad market
(All Shares) 3.01%. All top ten active counters, filled with PSEI components, rose. Foreigners were strongly on the buy side, netting
purchases of php1.246 billion.
Overnight, the Dow Jones Industrials spiked 250 points, encouraged by data on payrolls and construction. This even as production
levels were flat compared to month-ago figures. The optimism in Europe in the afternoon, propped by ECB President Trichet's not-too-
subtle assurances they are prepared to make the appropriate response needed to address the crisis and prevent its spread, assuaged
investors. Spreads on European bank credit default swaps, though still negative, narrowed.

Analysis & Outlook

WHILE the last two sessions have been encouraging, with a discernible shift in short-term sentiments back to positive gear, and puts the
market back in line with our year-end projections of between 4,100 and 4,200, the very magnitude of the advance puts us in a cautious, if
not defensive posture. We find no reason to make any changes in our balance-of-the-year strategy of positioning in Index/First-Line and
Second Line counters, hinged on their fundamental valuations. We remain confident that full year results will provide some justifications
for an upside. Even history is on our side: we have made mention in prior reports that the market has returned an average of 1.98% in
December trades over the last 10 years and +0.66% in the last five. Dragged by the global recession in 2008, with confidence ebbing to its
lowest, the market returned an average of -1.17% in the last three Decembers through 2009. The final month last year provided marginal
0.3% yield on equities.
There were several positives from a technical standpoint following the two day northern rush.

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 3
ACCORD CAPITAL EQUITIES CORPORATION
GF EC-058B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City, PHILIPPINES 1605 (632)687-5071 (trunk)
DAILY REPORT & OUTLOOK_for December 3, 2010
PSE Index Pts Change % Change Total Volume Total Value Advancers Decliners Unchanged
4,148.90 146.02 3.65% 1.452B Php7.868B 103 31 39

First, the index broke three relevant technical

levels: the month-long downtrend drawn
through the two successively lower peaks of
4,397.30 (November 4) and the 4,203.60
(November 19.); the 10pd EMA at 4,095.62 and
the 50pdEMA at 4,093.69. Note further that
the former likewise crosses-over the latter. On
this basis alone, we can expect a build up of
momentum to push the index further north.
(top chart.)
Second, the STO reading adds to the near-term
upside momentum argument as it draws a
bullish crossover above the trigger line at the
same time it emerges from the oversold line
(STO=20) Another perspective draws a break of
a downtrend line traced over the same time
frame as the index above, lending support to
the latter's own breakout. Again, this posits a
near-term buying opportunity. (middle chart.)
Third, the MACD's proposition is drawn along the same lines. A marginal break of the downtrend with the gap narrowing and poised to do
it's own upside break of the signal line. This indicates that the sell pressure has dissipated. The evidence lies in the actual market action
over the last two sessions . (bottom chart)
Other indicators however, suggests caution and patience in pricing – or tamed aggression. A couple of measures of market internals
continue to sound warnings of underlying weaknesses supporting the two-day surge.
First, the twin measures of On Balance Volume and
AccDist Line both do not show a trend-breaking
action, found in the index, that should support an
argument of reversing the short-term action. These
points are highlight by the arrows pointing to both
indicators ending up still below the downtrend line.
Ideally, for a breakout to be sustainable, both, or
either, should mirror such break. Better still, if the
indicators “lead” the breakout, rather than
accompany or trail it. This is the indication of
weakness. (two bottom charts)
Second, the Advance Decline Line, which warned us
that the 4,397.3 top was “weak” and technically
unsustainable, even as it rose from 4,188.31 in over a
month, have yet to show signs of “reversing” its
southern bias. There is no significant break of the
current trend in the series. The only consolation this
measure offers is that it has managed, thus far, to
hold above its year-to-date trough of -737 last May 25

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 3
ACCORD CAPITAL EQUITIES CORPORATION
GF EC-058B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City, PHILIPPINES 1605 (632)687-5071 (trunk)
DAILY REPORT & OUTLOOK_for December 3, 2010
PSE Index Pts Change % Change Total Volume Total Value Advancers Decliners Unchanged
4,148.90 146.02 3.65% 1.452B Php7.868B 103 31 39

when the Index settled at 3,102.59. From this standpoint, it agrees with the above indicators' suggestions that the near-term downside is
limited, thus making current levels good long-term bargains. (chart below)

SECTOR INDEX % CHANGE VALUE 0

ALL 2,850.31 3.01% 7,868.04 -100

FINANCIAL 949.39 2.66% 815.40
-200
INDUSTRIAL 6,936.60 3.57% 2,772.97
HOLDING FIRMS 3,459.57 6.18% 2,674.12 -300

PROPERTY 1,532.25 2.13% 549.79 -400

SERVICES 1,513.03 2.16% 637.43 -500

MINING & OIL 12,489.04 2.64% 418.32
-600
TRADES 16,137.00
BLOCK SALES 106.45 -700

FOREIGN TRADES 1,246.36 Two levels must now be determined given these evidences – the upper and
In Php Millions As of 0011H 12/03/10 lower reaches of the index for the last three (3) weeks of the year. As we
have mentioned on top, we have held on to our third revision of our year-
ASIAN MARKETS end target range of 4,100-4,200, levels we projected as the index finally
COUNTRY INDEX LAST % CHANGE broke through our second revision at 3,800 and levels that we adamantly
JAPAN TOPIX 877.21 1.29% kept even as the market threatened to break through, but failed, the
4,400-mark.
JAPAN NIKKEI 225 10,168.52 1.81%
CHINA HANGSENG 23,448.78 0.86% We do not discount that sentiments, owing mostly to positive
developments overseas and seasonal movements in equities, may push
CHINA SHANGHAI 2,843.61 0.71% the index past 4,200. What we have grown confident of, particularly in
TAIWAN TAIEX 8,585.77 0.77% light of the recent action, is the strength of the 3,950-3,970 support range.
SOUTH KOREA KOSPI 1,950.26 1.09% We believe this will hold and any retreats towards and into this band are
transformed into buying opportunities. Otherwise, all bets are off and the
THAILAND SET 1,031.97 1.41% bull may enter into a terminal phase.
INDONESIA JKSE 3,694.58 2.09%
Thus, moving forward, we see the market ranging between 3,970 and
INDIA BSESN 19,992.70 0.72% 4,200 , providing investors with a minimum 5.8% potential, or even more
SINGAPORE Starits Times 3,197.96 0.50% depending on the investment/portfolio or stock beta incorporated into
MALAYSIA KLSE 1,053.22 1.20% trades. These areas then will serve as our main trading guideposts. One
may take advantage of a momentum surge on breaks off these levels
VIETNAM HO CHI MINH 457.42 1.66% without losing cognizance of the risks involved.

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 3