July 31, 2000 Monday
 

Digital Telecom Phils. (DGTL). Digitel Chair J. Gokongwei is keen towards taking full control of Eastern Telecommunications Phils. Inc. (ETPI).  Digitel expects to complete its buyout for majority control by August 2000. (DGTL was unchanged at Php0.64)

Equitable Bank Corporation (EBC).  EBC officials confirmed ongoing talks for a potential sale of 6% to 20% stake of the bank to a Taiwanese bank.  (EBC was down Php1.50 at Php50.0)

JG Summit Holdings Inc. (JGS).  The Gokongwei group maintains firm interest to participate in the government's bid to dispose its 89% stake in PNCC for approximately Php30b. (JGS was down Php0.10 at Php2.90)

Petron Corporation (PCOR) - Petron announced plans to issue US$120m 3year notes to finance its capital expenditure program.  Current market estimates point to a rate of 110 basis points higher than LIBOR. (PCOR was unchanged at Php1.24).

Mondragon (MON). A business daily cited the removal of J.A. Gonzales as chair of Mondragon with ex Finex president J. Camba as the likely replacement as endorsed by the PentaCapital Group. (MON declined Php0.03 at Php0.69)

Metrobank (MBT).  Metrobank posted a 28% decline in net profits for the first six months at Php1.4b.  MBT's 2Q2000 profits declined 47% yoy to Php535m.  Lower margins and the expected one-off integration costs will result to a lower
rerating.  Metrobank officials however dismissed market risk estimate of profits of merely Php2b this year as realistically low!  On the other hand, MBT's separation package for Solidbank employees was one month for every year of service for those that will be absorbed by Metrobank, and 1.5months  for employees that will not be absorbed.  The package is cost positive for MBT given initial rumors of a 3months for every year of service.   (MBT was up Php3.0 at
Php167.0).

Global Equities Inc. (GEI). GEI Chair Nora Bitong indicated the following to a major business daily:  1) a change of corporate name is due to reflect its new IT partners, 2) GEI will invest Php200m in the IT venture, and 3) a capital hike
will be due with a rights offer at par of Php1/share. (GEI was unchanged at Php0.38)

RFM Corporation (RFM).  RFM reported a net loss of Php9m for 2Q2000 on sales growth of 7.4% at Php3.9b.
This is a disappointing operating results from a Php60m profit in 1Q2000.  (RFM was down Php0.10 at Php1.90)

Jollibee Foods Corporation (JFC). JFC reported a 1.5% yoy drop in profits for the first half of Y2000.   Operating costs and expenses outpaced revenue growth 18.4% versus 16.5% s for the period.  MARKET SCAN and PRICE ACTION.  JFC's
1H2000 financial results translates to an improved 2Q2000 performance but is generally within market estimates.  JFC's 2Q2000 revenues were higher given the price adjustment.  2Q profits increased 1.9% yoy as against a 5% decline in 1Q2000.  The improvement is largely due to the contribution of Chowking in its bottomline numbers.  However, Chowking's revenue growth slowed down from 15% in April to merely 10% by end-June.   Pizza chain affiliate - Greenwich Pizza Corp (GPC) posted a faster decline in revenue growth from a 5.5% decline in 1Q% to 12.% by 2Q2000.  The economic slump is effectively pulling fastfood revenues lower as personal consumption and spending declines.  However, JFC's dominant consumer play, a proven brand, low leverage and continued expansion plans
warrants a HOLD.  We do not expect a sizeable profit adjustments given the 2Q2000 performance and the 2H2000 consumer risks.  Price momentum is declining with key support viewed at 11.0 /10.0.  Further price weakness is expected as momentum signals remains at neutral level and has a lot of downside to reflect a recovery.  Immediate resistance at 12.25 with breakout trend at 13.50.  Reassess entry targets and indicators on a downmove below 11.0.

Meralco (MER/MERB) - Meralco released its 1H2000  financial report with the following highlights: a) revenues up 15.9%, operating expense was up 17.3%, operating income declined 4% to Php2.45b, and profits down by 7.7% at Php1.77b.  MARKET SCAN and PRICE ACTION.  The 1H2000 financials reflects better profitability in 2Q2000 although electricity sales growth was lower than market's general estimate.  Recommended rating remains a LONGTERM BUY.  Expect Meralco to revive its petition for a rate adjustment.  Albeit unpopular, WB-IMF can pressure the government to grant the increase prior to releasing the country's loan program.  This can provide price support and potentially rebuild interest given its favored utility rating. Price momentum is declining with key support price at 56.0 (from its recent break of price support at 59).  Risk at 56.0 is open but expect a bottoming-out trend over the near-term given an
existing price-momentum divergence signal.  Immediate resistance is at 62.0/65.0.  Downward channel remains intact with the trend break at 62.0.
 
 

July 28, 2000 Friday

Meralco (MER/MERB) - MERB was down Php1.50 at Php59.50.  Meralco reported that 1H electricity sales increased 8.3% with residential at 11%, commercial at 8.4% and industrial at 4.9%.  MARKET SCAN and PRICE ACTION.  The 1H2000 sales report reflects a slowdown in electricity sales in 2Q which is slightly below market estimates.  The effective 2Q2000 sales reflects a decline of 7.3% from 9.3% in 1Q2000.  It is quite alarming for our 2H2000 outlook since industrial sales and commercial sales registered a slowdown.  Since Meralco posted a 27% profit decline in 1Q2000 on higher electricity sales, it is rationale to anticipate a disappointing 2Q2000 profit report. Major brokerage houses are therefore likely to downgrade its profit target.  Price momentum is declining with immediate price support at 59.0 with next key support price at 56.0.  Risk at 56.0 is open but expect a bottoming-out trend over the near-term given an existing price-momentum divergence signal.  Immediate resistance is at 62.0/65.0.  Downward channel remains intact with the trend break at 62.0.

Global Equities Inc. (GEI) - down Php0.15 to Php0.38.  GEI disclosed its 3way partnership with Systems Standards, Inc. (SSI) and Systems Technology Institute (STI) via a swap of 60% of GEI to the 100% of SSI/STI.  SSI is an IT solutions provider with a recorded asset size of  Php235m and Php14.2m in profits for the first 3months of the year.  STI is one of the country's leading IT school  with an asset size of Php514m  and Php65m in net profits for the first 3months of the year.   MARKET SCAN and PRICE ACTION.  Market rumors proved to be true but the resulting market sell-off on news today was quite surprising.  We may attest the sell-off given the market's overal weakness.  Initial financial details warrants a second look.  The combined asset size of GEI (Php2.85b) with SSI (Php235.16m) and STI (Php513.887m) amounts to approximately a Php3.6b holding firm.  Based on SSI and STI's equity size of Php470m, the deal equates GEI giving up 60% stake for an effective equity contribution of merely 25.8% of the total or a 132% premium unless otherwise an equity revaluation or capital hike is due prior to the stockholders approval.   We are therefore looking forward to get further details of the 3way deal which will likely be released prior to its September 8th
stockholders meeting. GEI remains rated SPECULATIVE  until further release of financial details.  Broadly taken, IT ventures are really demanding an exhorbitant premium vis-a-vis old economy firms.  Several issues now befall GEI
that will attract investor action:  a) entry to the IT category or the new economy, b) new partners are profitable (SSI and STI registered profits of Php14m and Php64m, respectively in the past year) which will negate GEI's current non-profitable property-based operations, and c) valuations are attractive given the significant rise GEI's effective book value.  Speculations on GEI's entry to the IT field pushed share prices to a high of Php1.34 early this year which is approximately 2x is original  book value.  GEI's oversold momentum status and its hefty 91% technical price retracement at 0.37 heightens pressure for a recovery.  With near-term risk satisfied we are now in search for
a potential price consolidation buildup for a renewed rally.  Recent violent downturn however makes it too premature to justify a bullish posture.  Key support levels are at 0.37/0.28 with key upmove breakout to be confirmed at 0.50
with 0.69 as its intermediate target.  Upmove extension at 0.85 points to a medium-term upmove objective at 1.04.  Our broker scan show that today's huge seller was not among the major buyers the past two months where the moving
average is pegged at 0.68.  Lack of follow-through selling on heavy volume over the next few days can therefore spark a volatile rally.
 

July 27, 2000 Thursday

Globe Telecoms (GLO). The Company confirmed newsreports of its planned issuance of 12m Philippine Depositary Receipts (PDR).   Globe's PDR issuance has long been strategically announced by the company in its investor briefing last 1Q2000. (GLO closed Php0.25 lower at Php15.25)

JG Summit Holdings Inc. (JGS).  JG Summit released to the PSE its confirmation of a news article citing JG Summit Chair J. Gokongwei of an estimated net profit of Php1b for the first six months of the year.  Financial details are not yet
available.(JGS closed Php0.10 lower at Php3.0)

Digitel (DGTL). Digitel informed the PSE that preliminary estimates point to a net profit of slightly over Php2m in 1H2000. (DGTL closed Php0.05 lower at Php0.64)

SM Prime Holdings (SMPH).  Company officials commented that the newly passed retail trade liberalization act will benefit occupancy of its upcoming malls.  Market fears of its negative impact on existing malls was downplayed since bulk of its existing malls are nearly at full occupancy rate. (SMPH closed lower by Php0.10 at Php4.85)

San Miguel Corporation (SMC at Php51.0; SMCB at Php52.0).  SMC released the following 1H2000 operating results this afternoon prior to its scheduled investor briefing:  net profits increased 25.6% to Php3.4b; revenues increased
13% to Php42.4b. (Details of the investor briefing will follow tomorrow) MARKET SCAN and PRICE ACTION.  Preliminary review reflects operating results staying within market estimates.  SMC's 2Q2000 performance reflected a surge in revenue (estimated at 17% from 8.7% in 1Q2000) and profit (27.3% in 2Q2000 vs 24% in 1Q2000) growth.  SMC officials are confident that they are on-line with their benchmark targets.  Potential upgrade in earnings outlook is unlikely as its strong performance is within market expectations.  Fundamental rating for SMC remains a LONG-TERM BUY. Underlying overhang comes from a perceived price inaction until the sale of 27% stake of the coco levy fund is completed.  There are also lingering fears that a protracted agricultural sector growth in 2H2000 may affect beverage sales.  SMC's thrust on its organizational streamlining and synergies are unlikely to generate a huge bottomline impact this year.  SMC's price range is relatively less volatile on perceived steady buying support from E. Cojuangco's group. Bulk or 53% of today's buying transaction came from UCPB and Merril. Price momentum is declining but entering oversold status.  Key reversal signals have yet to be confirmed on further price upmove.  Immediate price support (SMCB) is at 50.50/49.50 with 48.0 as its key support.  So far, its key support at 48.0 seems firm and provides a perceived bottoming-out scenario near this level.  Key resistance is at 54/56.

Belle Corporation (BEL) - closed unchanged at Php0.95.  Belle Corporation confirmed news reports that it is set to dispose non-productive assets, including its interest in MagiNet.  MARKET SCAN and PRICE ACTION.  Belle
continues to suffer from the its huge loan buildup and a parallel property market slump since in 1997.  Unprofitable investments in Philcom, Sinophil and Legend have forced the firm to move for debt restructuring given its outstanding
liabilities amounting to Php18.95b as of 1Q2000.  Bullish play on the issue given the rumored potential increase in board representation of SSS and Henry Sy and the programmed IPO of its jai-alai venture has hopelessly faded.  Expected string of asset disposal is unlikely to regain interest on the stock as none of its core property business is likely to turnaround bottomline numbers. Highly leveraged firms and its core business focus in the property sector clearly puts Belle among the equity to avoid.  Debt rehabilitation will definitely take a long time.  Belle's shares are among the active speculative stocks this year given its price range of Php0.71-4.40.  Momentum signals reflect no key reversal indication yet but a 3wave downmove scenario hints of a possible bottoming-out scenario.  Key price support is at 0.90/0.82 with 0.71 likely as a firm bottom.  Immediate price resistance is at 0.99 with 1.10/1.24 as its immediate fibonacci price target.

July 26, 2000 Wednesday

San Miguel Corporation (SMC).  Indicative reports show a strong 2Q performance by SMC. Anxiety over potential revenue and sales target downgrade in 2H2000 due to the oil price hike and the flood damage remains unlikely as preliminary sales reports for the first week of July remains consistently strong.  Key impact willbe realized sometime mid-August.  (SMC closed unchanged at Php51.0; SMCB closed unchanged at Php52.0

SM Prime Holdings (SMPH) / Ayala Land Inc. (ALI) / Robinsons Land Corp (RLCB).  Seventeen Congressmen filed a petition with the Supreme Court (SC) for the repeal of retail trade liberalization act given its violation of the
constitution.  Cited were violation on: a) preferential use of Filipino labor, b) preferential rights of operation of wholly owned Filipino enterprise, c) economic protectionism, d) and non-alienation of natural resources.  (SMPH closed lower by 0.05 at Php4.95; ALI closed unchanged at Php5.5; RLCB was not traded at Php2.26)

Petron Corporation (PCOR)  Petron effected a Php0.55 oil price hike yesterday.  PCOR closed Php0.06 higher at Php1.30

Ayala Corporation (AC) / Globe Telecoms (GLO).  Ayala Corporation announced its issance of Php2-3b worth of 5year notes to finance its capex program this year.  AC will allocate Php15b of its Php20b programmed  capex for Globe Telecom's technology investment. (AC declined by Php0.1 at Php6.50; GLO gained Php0.25 at Php15.50)

La Tondena Distillers Inc. (LTDI). - up Php0.50 to Php32.50. Some highlights of LTDI's investor's briefing yesterday were:  a. strong 1H sales volume growth: hard liquor at 18%, bottled water at 85% and 14% for rtd juice b. hard liquor market share increased from 50% to 57% c. newest subsidiary - Sugarland is now the second biggest profit contributor
with sales volume  up 30%; and d. 1H sales grew 39% yoy to Php7b; operating income up 48% to Php1.5b and net
income up  83% at Php794m. MARKET SCAN and PRICE ACTION.Results were largely within market estimates.
Market fear of a slowdown in 2H2000 sales were dismissed by Management as liquor sales remains favorable for the first two weeks of July.  Its market penetration penetration strategy and its newly launched promo campaign (Ginebra Bingonaryo) was notably successful.  The expected slowdown in profit growth (125% in 1Q to 57% in 2Q) was within market consensus and reasonable.  Revenue growth was better than expected (up 44.5% in 2Q from 33% in 1Q).  Net margins were effectively lower in 2Q but we do not expect further significant deterioration. Market watchers are not expected to downgrade its BUY rating on the stock based on the recent operating report.  Price and momentum trend is declining but momentum remains far from oversold status.  Reversal signals are not evident which puts key price support at 30.50/29.0. Breakout wave trend  from its recent high at 35 (key resistance) remains unlikely  unless further lows are set.  Medium-term target  to approximate 37/42.

Ionics Circuits Inc. (ION)-  up Php1.0 to Php14.0.  The Company reported it has finalized its search for investment partners for its manufacture of high precision injection molded engineering plastic products.  Ionics formed a new
subsidiary - I Omni with the following partners: Omni Mold Ltd. of Singapore, The Tech Group of US and ICC Ventures Inc. of the Philippines.  I Omni's molded products will effectively increase local content of products manufactured by
Ionics.  Net impact is an increased margins from product orders and an expanded market given its expanded manufacturing capability.  Marginal increase in profit target for 2001 and 2002 will likely be upgraded.  MARKET SCAN and PRICE ACTION. Foreign buying was evident but today's volume were largely from local houses. Price momentum is toppish at current levels.  Increased pressure for a price correction points to a price support at 13.50/11.75.  Price-momentum divergence is getting more profound to warrant a sell on rally based on a trading action.
Minor wave extension to 15.50 is possible.

July 25, 2000 Tuesday

Metrobank (MBT) -   Metrobank EVP Alfred Javellana reported that second quarter profits will be lower than the past year  despite signs of growth in loan and the bank's improved loan exposure. MBT closed higher by Php1.0 at Php168.0.

Equitable Bank (EBC). EBC-PCIB confirmed news reports of a net profit of Php720m in the first six months of the year.  EBC also reported that it is pursuing talks for a possible buy-in of a regional bank.  EBC was up Php2.0 at Php52.0

Music Corporation (MUSX).  Music Corporation  announced that it registered a profit of Php1.89m for the first six months of the year.  Albeit a  meager income, the reported profit translates to a turnaround from a Php2.2m loss in
1Q2000.  The company briefing will be held today, 3pm. MUSX was down Php0.2 to Php5.10

Philippine National Bank (PNB). The Central Bank is not inclined to allow the targetted merger of PNB and Allied Bank since a sizeable block of Allied Bank remains a target of sequestration.  PNB closed higher by Php1.50 at Php59.50

Mondragon International Philippines, Inc. (MON) Creditors of Mondragon will meet on Wednesday to form a committee to discuss the planned debt restructuring program.  Initial information includes a proposed 8-10 year debt rescheduling at 8% interest and an equity conversion. MON closed Php0.02 lower at Php0.78

Metrobank. (MBT) - up Php1.0 to Php168.  Indicative lower earnings in 2Q2000 was largely expected by the market considering the consecutive streak of profit decline since 1998.  MBT's first quarter profits registered an 8% decline at
Php834.6m.  MARKET SCAN and PRICE ACTION.  It is more likely that the profit decline will be greater than the drop in 1Q2000.  Expect more generous provisioning for bad loans but it may not be very significant as the bank's NPL
was reported at 11% last May.  Investor's fear of one-time merger costs to beanother hurdle aside from the ongoing economic slump which is keeping margins narrower.  MBT's rights offer pegged at Php160 is now a benchmark for
bargain-hunters.  Expect follow-through selling now largely from foreignaccounts to continue upon release of its 2Q2000 performance.  Sentiment is therefore weak towards the issue but we believe a significant portion is
already priced into its current value at Php168.  Immediate price support is its recent low at 165 and a fibonacci downwave break target at 150.  MBT is rated a HOLD.  Its price to book rating of 1.1x is relatively cheap and worth a
second-look.  Trading opportunity exists as its current price range comes parallel to its free-fall range of 190-110 and its momentum indicators are at key oversold status.  Immediate breakout price is at 173 with 192 as next upmove
objective.

July 24, 2000 Monday

Music Corporation (MUSX).  Music Corporation  informed the PSE that it posted a loss of Php21.22m in the first three months of the year.  Revenues for the first quarter increased 49% from Php156.7m to Php232.88m. Music's first quarter
operating performance has long been reported to the market.  We do not expect any valuation changes as most of the positive developments particularly its steady decline in operating losses have been factored into. MUSX was up Php0.1
to Php5.30

Meralco (MER/MERB). A handful of Meralco employees staged a labor strike last Friday demanding increased job security and benefits.  The Department of Labor and Employment (DOLE) has already issued a return to work order last Saturday -July22nd.  Meralco's efficiency thrust announced last year includes a programmed14% cut in workforce beginning 1999 by virtue of natural attrition and an offer for early retirement.  We do not expect any violent or long labor-management dispute to affect operations. MERB was down Php0.5 to Php59.50

Metro Pacific Corporation (MPC).  MPC's bid for Lot A(2ha for office and entertainment), Lot B (8.54ha for hotel/condominium and museums) and Lot E (10ha information technology special economic zone) in Fort Bonifacio is under review and will likely be finalized by BCDA before end-August.  So far, they are the sole bidder for Lot A and E while it is a joint bidder with SM InvestmentCorporation for Lot B.  MPC was down Php0.02 to Php0.62

Philippine National Bank (PNB). The Templeton Asset Management denied newsreports that it sold its 12% stake to Citigroup.  PNB closed higher by Php2.0 at Php58.0

La Tondena Distillers Inc. (LTDI).  The company reported an 83% increase in net earnings of Php794m for the first six months of the year.  Revenues for the period grew 39% from Php5.03b to Php7b.  MARKET SCAN and PRICE ACTION.
Indications from the first half report reflects an expected slowdown in profit growth from a 125% increase in 1Q2000 to 57% in 2Q2000.  Revenue growth however continues to improve further from a 33% growth in 1Q2000 to 44.5% in 2Q2000.  Details of the LTDI's operational progress will be reported tomorrow in its 2Q2000 briefing.  Market focus will be on a possible downward adjustment in sales volume growth target after the recent Luzon flooding and on the operating performance and outlook of its newly acquired subsidiary -  Sugarland.   Share price momentum is declining from overbought levels with significant room for the downturn. Key price support levels are at 32/30.  A 3wave upmove scenario may have peaked at 35 which puts a risk for a downturn to test the 29/26 level over the medium-term.  A more bullish 5wave scenario warrants a consolidative test with 29 as a firm support but with a possible upmove break of 35 with 38 as its minimum objective.  LTDI remains a rated BUY unless operating signals from tomorrow's company briefing support a slower-than expected 2H2000 revenue growth.
 

July 21, 2000 Friday

SPI Technologies (SPI).  Initial reports point to a likely announcement of  two (2) new accounts generated for its call center operations.  Amexco is one of the new clients with the targeted business capacity requiring SPI to put another
call center.  With Amexco's entry, 2 or three more clients are likely to follow. SPI gained 7.2% at Php7.40.

Global Equities Inc. (GEI).  Market talks revived the rumored venture of GEI into the lucrative IT market.  GEI already reported to the PSE last month that there are no ongoing discussion for a planned backdoor listing on GEI but confirmed that it is looking into a possible entry to the IT business.  Market insiders expect GEI to announce its new IT venture offering services that is parallel to the processing requirements of Equitable Bank card network.  GEI was
up 8% at Php0.54.

Republic Glass Holdings (REG).  The newly signed antidumping law is seen to benefit REG's petition for an investigation for an alleged dumping by two (2) Chinese companies as it sold glass at a price 45% lower than in China.  The case
is currently pending with the tariff comission. REG closed unchanged at Php0.78

Philippine National Bank (PNB). - up Php0.050 at Php56.50.  Highlight of PNB's stockholders meeting today are as follows:  a) increase in authorized capital from Php15b to Php50b; b) a 5:6 rights offer; c) a change in par value from
Php100 to Php60, and d) issuance of 171.85m warrants.  MARKET SCAN and PRICE ACTION.  The approved resolutions were not at all surprising as PNB officials have provided the market an indication of such changes several weeks ago.
Other perfomance indicators released were:  a) an above-market NPL ratio of 35% which will be reduced to 25% by end-2000, b) a target loan growth of 8%, and c) an assurance that profits of at least Php100m will be generated this year.  Newly significant development points to a planned merger of PNB with Allied Bank,  and the National Government's consent to keep government funds with PNB until 2003.  Trade interest on the issue was relatively low on fears that Templeton's 12.6% stake will likely be gradually sold down since they do not inted to participate in the capital hike.   PNB remains a rated AVOID as other banking stocks offer better valuations.  Momentum trend remains on a decline with minor price resistance at 59.50.  Key breakout target at 63 offers a longupmove objective at 84.  Immediate price support is at 54.50/51.

Alsons Cement Corporation (ALC).  Alsons reported that the Board approved to grant Blue Circle the right to buy 69.63% of its stake in Iligan Cement Corporation.  Blue Circle has the option to avail of the right until October 20, 2000.   MARKET SCAN and PRICE ACTION.  The sale of its stake has long been expected given the uprofitable operations of Iligan Cement.  ALC registered a loss of Php1.4b in 1999 and Php240m for the first three months of the year.  The
inevitable sale was expected as the construction slump and the influx of lower priced imported cement resulted to a consecutive 7 quarters of operating losses. Blue Circle is the only potential buyer as it already holds 10% in the Iligan
cement plant and is focused on consolidating cement manufacturing in the asian region.  ALC's stock is relatively illiquid and is rated AVOID.  We do not expect any build-up on the price since no share swap is involved.

July 20, 2000 Thursday

Crown Equities Inc. (CEI) - CEI has long been rumored to be interested to take a stake in PNCC directly or through its specific road development projects.  Its prospective bid on PNCC points to an anticipated entry of a foreign partner
considering its equity size of merely Php2.1b and with an operating loss of Php6m as of end-March 2000.

Ayala Corporation (AC) - unchanged at Php6.60.  AC announced an ongoing  talks for the possible investment of Hormel Foods Corp. of the US in its subsidiary - Purefoods Corporation (PFC). PFC is a listed subsidiary with Php7.8b in assets and market forerunner in processed meats, poultry, livestock and the feeds industry.  If AC decides to sell 20% to 30% of the firm, the divestment can readily generate Php1.6-2.3b. MARKET SCAN and PRICE ACTION.   AC's potential sale of part of its ownership to Hormel is likely a precondition for bigger investment undertaking for PFC.  Such development is definitely positive for AC as it signifies growing belief of multinationals in the management expertise of AC.  Partial divestment on PFC also will be a cheaper alternative than obtaining new loans for the conglomerates other projects. Long term impact is theoretically  a better ROE.   However, today's broad market sell-off overwhelmed such positive development on AC.  AC's price momentum is currently neutral but toppish as it failed to break key resistance at 7.0.  Immediate price support is at 6.40 with 6.0 as a key support.  AC is a recommended LONGTERM BUY.  Trading outlook points to a reentry on the stock below 6.40 with a recovery objective at 7.20-7.60.
 

July 19, 2000 Wednesday

Digitel (DGTL) – The National Telecommunications Commission (NTC) is currently set to release its decision on Digitel's application to be the country's 7th cellular phone operator.  NTC's concern is the financial capability of Digitel considering its current retained earnings horde is significantly below the projected capital investment requirement of Php3-4b to operate a GSM system.  Digitel is expecting to finance the capex via suppliers credit which can accommodate up to US$150m. (DGTL closed unchanged at Php0.73)

Petron Corporation (PCOR). The second-tranche of its targeted price hike is expected to be implemented this week.  Consumer groups have recommended to Malacanang to work for a partial subsidy both from the government and from the oil firms in order to cut the pump price increase from Php1.30 to Php0.80. (PCOR closed Php0.04 lower at Php1.32)

Globe Telecoms (GLO).  The NTC has set a public hearing before the end of the month to discuss the petition to renew the license of Islacom.  Islacom failed to deliver the required 700,000 land lines as NTC's audit reflects merely 510,000 lines. (GLO was unchanged at Php15.50)

Ionics Circuits Inc. (ION) - Ionics is set to finalize next week its new jointventure agreement with a foreign partner for a new subsidiary that will manufacture high precision molding. (ION was

Belle Corporation (BEL) - Separate court petitions questioning the validity of Pagcor's franchise transfer for its jai-alai operations is set to be consolidated.  The petition pertains to Pagcor's jointventure with Belle and Fil-gaming for jai-alai operations in the country.  (BEL was unchanged at Php1.0)

Mondragon International Philippines, Inc. (MON) - up Php0.06 to Php0.90.  Mondragon announced that its Board has granted the corporation the authority to enter into a memorandum of agreement with Pentacapital Investment Corporation.  The agreement stipulates that Pentacapital will arrange for Mimosa Leisure and Resorts Corporation (MLRC) a fully secured last-in-first-out (LIFO) term loan amounting to Php650m to be used to settled debt obligations with CDC, Pagcor and the BIR.  Pentacapital is also mandated to nominate a new management team for MLRC and it will negotiate in behalf of MLRC its liabilities negotiation with CDC, Pagcor and the BIR   MARKET SCAN and PRICE ACTION.  Momentum is rising with breakout price set at 1.04 and the next immediate resistance at 1.18.  Price support is pegged at 84/74. Speculative interest for MLRC's revived operations is likely given the new term loan and this will likely be followed by another strategic partner if all the necessary clearances to resume operations are granted.  Fundamental rating on the issue remains an AVOID.  Trading interest however will gather momentum if trading volume intensifies on test of 1.04. Technical outlook is bullish since a 3rd wave objective has a minimum at 1.28.

Philippine National Bank (PNB).  Strabuck Equities Corporation – an investment  firm controlled by Lucio Tan was the lone bidder in the auction of the government's 30% stake in PNB.  Starbuck's officers commented that Lucio Tan's bid to increase its stake in PNB is geared to tighten its management control considering its long-term rehabilitation plan for the bank.  Starbuck's submitted a bid of Php6.267b or Php100 per share, a significant 25% premium to NG's floor price at Php80/share and a 72% premium to yesterday's board price at Php58.00.  Starbuck's representative has indicated Lucio Tan's planned participation in the proposed capital hike.  MARKET SCAN and PRICE ACTION.  Lucio Tan's winning bid will likely stir a controversy on alleged cronyism and a possible violation of the General Banking Act since Lucio Tan should not hold majority control in separate banks.  The Php100 per share bid is within market's rating of 1.33x the adjusted book value (Php60/share).  PNB is rated AVOID among the banks given the long recovery period for it to restore profitability status and its upcoming capital hike call.  Trading interest however due to the successful bidding and the price will generate followthrough buying interest.  Immediate price resistance is pegged at 65/70/83 while price support is at 60/58.  Momentum is rising but we do not expect board price to match the Php100 bid price given the proposed capital hike.

San Miguel Corporation (SMC). SMC informed the PSE that it is not in a position to comment on a news article which referred to Asahi Breweries Ltd. of Japan as one of the potential buyer on the sale of the government's 27% stake in SMC.   MARKET SCAN and PRICE ACTION.  SMCB's immediate price support is at 50.50 with key resistance at 53.50/56 level.  Speculation of NG's premium floor price requirement for the auction of its 27% stake can slowly stir investor interest on the stock.  Breakout price at 56 points to a minimum objective at 58 with 62 as the next fibonacci target.  Momentum is neutral and declining which warrants a buy on weakness for trading enthusiasts.
 

July 18, 2000 Tuesday

Metro Pacific Corporation (MPC) - up Php0.01 to Php0.66.  MPC's continued interest to participate in the recent BCDA auction for five lots at the Ft. Bonifacio and Villamor Air Base is highly regarded as it speaks well for its
property development thrust.  However, the relatively low participation of other property developers highlights the current financing and expansion difficulties by most developers.  MPC is expected to pursue further divestment of its
non-property firms such as Steniel and E-bank.  MARKET SCAN and PRICE ACTION.   ALI's financial bid  equivalent to Php77,200 per square meter for Lot C in Fort Bonifacio will uphold current price valuation in the area.  MPC's book valuation is likely to be adjusted higher given its cash horde from the sale of its PLDT stake and the parallel valuation from ALI's Php77,200/sqm bid.  At a modest book valuation at Php2.0, MPC trades at a cheap 67% discount. Buying interest on MPC is largely from local investors as foreign accounts continue to remainuninterest in the country's property firms. MPC's rating remains a LONGTERM BUY. Immediate price resistance is pegged at 0.71/0.76 while immediate price supportis viewed at 0.62/0.59.  A bullish break at 0.76 has a target upmove objectiveof 0.82-0.95.

ABS-CBN (ABS) - down Php0.5 to Php51.50; ABSP was down Php1.0 at Php51.50.  ABS reported today that interim results for the first six months reflects a 15% increase in revenues, a significant improvement from a 10.6% in 1Q2000 and in line with its targeted 16% revenue growth for the year.  ABS attributed therevenue growth on increased market share and its creative marketing approach.  MARKET SCAN and PRICE ACTION.  The effective revenue growth for 2Q2000 of 19.4% was significantly higher than market estimates.  ABS is focused to increase its revenues to marginalize bottomline effect of increased operational costs giventhe capitalization of its building investment.  The 19.4% revenue growth is unlikely to be maintained for the next two quarters as the economic slump effectively resulted to cuts in ad placements by top corporations.   ABS however remains a BUY given its own convergence theme and its focused business interest. Immediate price support at 51.0/49.50 while key price resistance is viewed at 56.50.  Momentum is declining and entering oversold status from its 7day consecutive downmove from 56.50.
 

Globe Telecoms (GLO) - Globe's strategic partner Singapore Telecommunications announced its US$2b investment in Asia's biggest undersea cable due for completion in 3Q2001.  Singtel's partners such as Globe is expected to benefit
from the investment as it is positioned to capture rising capacity demand from internet users particularly on the projected consumer use of 3G technology in mobile phones.  MARKET SCAN and PRICE ACTION.  GLO is rated a fundamental BUY and is widely known to have generated interest among institutional buyers given
its stronger-than-market profit growth rating and its highly focused business exposure.  Immediate price support at 15.25, while price key resistance is at 16.0.  Market outperformance may taper down to test support levels.  Momentum is toppish with its price pattern seemingly bearish with a bias of a wedge pattern failure on a downmove break at 15.0. Next key price support is at 13.25.
 
 

July 17, 2000 Monday

Philippine National Bank (PNB) - up Php0.50 to Php58.50.  The National Government's auction for its 30% stake in PNB is firm to be sold on July 19th before the July 21st special stockholders meeting.  PNB also informed the exchange of the resignation from the Board of Mr. Robert Romulo. Three (3) senior officers also resigned, namely: Basilio Cruz Jr (EVP), Manuel Mendoza (EVP), and Largion Najera (SVP).  The likely sale of NG's stake and the full control of L. Tan has  already kept the banking community aware of an upcoming resignations among senior officers.   The recent hiring of Mr. Araneta in RCBC has increased speculations that others PNB officers are likewise expected to move in the Yuchengco group.  MARKET SCAN and PRICE ACTION.  Current investor interest on PNB has been little-to-nil with near-term focus on the likely pricing of the sale of NG's stake.  Momentum signals are at oversold status but trade activity is relatively low.  Foreign selling the past week’s were not present today.  Top buyer today was PNB Securities which somehow increased speculations that a likely floor price of at least Php85/share will be in effect for the government’s stake.  Breakout price is at 60 with 65 as the next interim target.  Key price support levels are viewed at 56.50/54.50.
 

July 14, 2000 Friday

La Tondena Distiller Inc. (LTDI)  - up Php0.50 to Php35.00.   The severe flooding in northern Luzon the past week threatens a cut in the programmed sales growth of LTDI this year.  The northern Luzon accounts for the bulk of LTDI’s revenue.  Such news may partly derail investor interest on LTDI although a partial cut in its targeted profit growth of 60% this year remains significantly above market performance.
Expect 2Q2000 profits to be lower than its 125% yoy growth registered in 1Q2000 given a price hike in liquor in May1999.  MARKET SCAN and PRICE ACTION.  Domestic and foreign buying in LTDI remains firm given its BUY rating generated by most brokerage houses.  Minor weakness from increased news from the proposed increased levy on sin taxes and the flood factor may be taken as an opportunity to accumulate further.  LTDI’s key support is at 32/30 and next immediate price resistance at 37.  A bullish wedge  price pattern may be in progress and is set to breakout soon towards the 37 price level.  However, technical optimism is tapered by it’s toppish momentum index which warns of a pullback.  In such instances,  the bullish scenario prevails with a short consolidative trend as its worst expected progress pattern.

Music Corporation (MUSX) – up Php0.20 to Php5.40.  Music is noted among the net beneficiaries of the peso depreciation.  The market is anticipating further lower net losses in 2Q2000 for firm after a progressive improvement in operating income.  Its 2Q2000 earnings report will be released before the end of the month.  Initial corporate newsbits point to a potential 100% networking revenue growth this year with its order backlog at US$10m and a target of US$18m for the year.  MARKET SCAN and PRICE ACTION.  Recent transactions have seen very minor foreign investor involvement.  This is warranted as major rating on the stock remains an AVOID given its series of losses and with recovery due Yr2001.  Recent share price slump from 6.10 to a low of 4.70 has placed its momentum indicators at oversold levels.  MUSX gained added foreign interest when it was included in the MSCI index last May when its share price was hovering around Php6/share.  It is therefore likely to return to such price levels easily given the fundamental developments and the market’s improved status.  MUSX is at its minor resistance at 5.50 with the next immediate resistance at 5.90.  The recent upmove past 5.20 has a fibonacci price objective towards the 6.20/6.70 level.
 
 

July 13, 2000 Thursday

Metro Pacific Corporation (MPC) - up Php0.01 to Php0.71.  MPC's parent holding company - Metro Pacific Holdings, Inc. (MPCH) has consolidated its interest in PLDT through Metro Pacific Resources, Inc.(MPRI). MPC and MPRI has interest in PLDT after Smart was acquired by PLDT early this year.   The negotiated transaction amounted to Php12.1b for an equivalent price of Php900 per share.  MPC's divestment is a continuing effort to be a property focused firm.  The divestment in its PLDT stake reportedly increase its property asset percentage at 90%.  MPC's remaining non-property investments are Steniel Mfg., Metrovet, E-bank and Negros Navigation.  MARKET SCAN and PRICE ACTION.  MPC's divestment is well regarded to regain investor interest as it self-corrects its investment portfolio.  Net beneficial impact of the announcement is an increase in its net asset value given the huge premium paid (against market) for the PLDT shares.  Rough market estimates point to an adjusted NAV of Php1.7/share which makes MPC relatively cheap at a steep 59% discount to NAV.  MPC remains a rated LONGTERM BUY.  Trade activity is largely traced to local investors.  Immediate price resistance is seen at 0.76 with price support at 0.65.  Trading opportunity exists on an upmove break of 0.76 confirms a long 3wave rally with 0.84-0.86 as its fibonacci price objective.

Ajo.net Holdings, Inc. (AJO) -  up Php0.08 to Php1.22.  AJO announced it will form a joint venture firm to be called MP3Manila.Com, Inc. which will own and operate an existing website located at "mp3manila.com".  AJO will invest up to Php4m for a 40% stake in the firm which claims to be the country's first and all original Filipino internet portal music site. The website is designed to be the primary medium for unsigned local artists and musicians to showcase their compositions with downloadable music and will host live virtual concerts and music events.  MARKET SCAN and PRICE ACTION.  AJO's investment in MP3Manila.com further fortifies its ecommerce thrust as it has already investments in three (3) internet related firms namely, Incredibly EZ Corp, Incredibly Fast Internet Co. and Chikka.com Ltd.. AJO's 40% stake in MP3Manila.com further reflects its added enthusiasm in the ecommerce business as it is other ecommerce investments only represents 8% to 10% of the firm. These new businesses can fortify its record price low at 1.04 as a potential trend bottom.  Next immediate price resistance is at 1.34/1.45.    AJO is a relatively illiquid stock with largely domestic following only.  Momentum is at oversold status which may substantiate a gradual steady price upmove.  Key breakout price is at 1.94.

ICTSI (ICT) - up Php0.02 to Php1.34.  ICTSI Chair E. Razon reported a net negative impact to ICTSI's bottomline given the peso depreciation.  ICTSI reported that for every one peso depreciation, ICTSI gains an additional Php50-60m on revenues but their peso provision for its dollar debt increases by Php100m.
MARKET SCAN and PRICE ACTION.  Investor interest on ICTSI remains low after its untimely disclosure of its labor problems in its Argentina operations last year.  Since the closure of the Argentina operations, ICT already bagged Tanzania and Thailand ports to replace lost revenues.  Focused recovery of the firm is well regarded which warranted a LONG TERM BUY recommendation.  Longshot optimism points to its IPO of its international unit in UK next year.  Transaction volume remains relatively low. Key resistance at 1.40/1.52 with breakout objective pointing to a price gap at 1.74-1.80.  Key support is pegged at 1.24 with major breakout target set at 1.54. Long-term momentum indicators are neutral but rising which hints of a good accumulation.

July 12, 2000 Wednesday

BENPRES CORPORATION (BPC) – up Php0.10 to Php4.55.  BPC’s telecom affiliate – Bayantel announced a cut in its IDD rates from US$0.85/minute to US$0.45.  The rate cut is its competitive response after a parallel move by market leaders PLDT and Globe.  Such rate cut effect is net neutral as  the rate cut will encourage greater outgoing call volume which will negate the revenue cut.  Key investor focus on BPC its relatively attractive valuation and its upside potential from the following: a) Meralco’s improved profitability given a pending rate increase petition, b) MER and FPH’s enhanced business with its participation in Napocor’s privatization, and c) its bold entry in the ecommerce trade thru Pinoycentral.com.  MARKET SCAN and PRICE ACTION.  BPC is on a roll for a 5day price rally from Php4.15  with a noticeable inflow of foreign interest.  Top buyers since last week were JF, WICARR and SG while net sellers were Regis and  ING.  The market’s underlying nearterm bearish bias is expected to trigger some minor profit-taking.  BPC’s technical price pattern breakout at 4.20 warrants an upmove towards the 4.70-4.9 level which suggests a near-term sell on rally tact.  Immediate  price support is pegged at 4.25. Fundamental valuations has an underlying LONGTERM BUY recommendation.  BPC currently trades at a relatively cheap 21% discount to its book value of  Php5.75.

MacroAsia  Corporation (MAC) – up Php0.15 to Php3.60.  Macroasia – an investment holding firm controlled by Lucio Tan announced today its jointventure agreement and share purchase agreement with Lufthansa Technik AG.  The jointventure company will be named Lufthansa Technik Philippines, Inc. with Lufthansa AG holding 51% while Macroasia gets 49%.Lufthansa Technik AG is a listed German firm handling passenger and cargo airline services for transportation worldwide. Its vast services encompass flight and connection programs with the Star Alliance group.  It is also has subsidiaries for catering, travel agency, maintenance and travel insurance programs.  Recent launch is its own E-Ticketing.  The Lucio-Tan controlled -Philippine Airlines has had long ties with Lufthansa as it has been its technical consultant for the past two years.  PAL reported in April2000 its ongoing negotiation with Lufthansa to handle aircraft repairs and maintenance while it will focus on running the airline.  Initial details include Lufthansa’s acquisition of PAL’s maintenance and engineering division which has PAL’s technical center and a hanger for small aircraft.  Preliminary amounts mentioned before was roughly US$48m. MARKET SCAN and PRICE ACTION.
Our premise on the  US$48m investment by Lufthansa Technik AG’s 51% stake in Lufthansa Technik Phils Inc.  translates to a company worth Php3.7b-4.1b at an exchange rate of Php40-44/USD.  The US$48m investment worth Php1.9b-2.1b can be swapped to a maximum 40% equity stake in Macroasia.  The 40% equity stake or 500million shares translate to a Macroasia share price swap target of Php3.8 to Php4.2 (for a peso-dollar rate of Php40-44/US$).  Such valuation is possible on the premise that Macroasia maintains its equity share size. Based on the added equity of US$48m, Macroasia’s book value will effectively increase from Php1.1b to Php3.2b or a book value per share increase of Php0.90 to Php2.5.  Since Macroasia’s FY2000 price to book trading range is  2x-6x, simulated price is P5.0-P15.0.  MAC’s shares are relatively illiquid but its uptrend price pattern has been intact from its record low at 2.30.  Today’s announcement adds further to its steady price gain from 3.15 last July6th.  Next immediate trend resistance is viewed at 4.25/4.80.

Mondragon (MON) – down Php0.03 to Php0.77. Mondragon issued a memo to the PSE stating it has no knowledge of the alleged takeover bid being worked out by Tony Cojuangco’s group and is therefore not in a position to comment on the issue.   Mondragon further stated to the PSE that it is exerting all efforts to conclude negotiations with investors who will provide additional funds to settle its obligations to the government and normalize operations in Mimosa Leisure Estate.  The Cojuangco’s group is notably the most aggressive rumored investor so far but its recent acquisition of UrbanBank may derail its focused interest in its bid for the Mimosa Leisure Estate.  MARKET SCAN and PRICE ACTION.  MON is on a 3day downmove from its recent high at 0.85.  Medium-term trend is a bearish trend reeling from its June 14th high at 1.04.  No divergence signals are evident to warrant a complete reversal.  Immediate price support pegged at 0.72 looks like a minor support while its key price support is at 0.64.  Minor price resistance seen at 0.85.  Major breakout price target is its key price resistance at 1.04 with fibonacci objective at 1.16.  Momentum indicators is declining but has not reached oversold status yet.  Mondragon’s huge debt and insolvency requires a massive capital buildup.  MON is rated AVOID given its highly speculative status.  Technical trading play warrants a quick sell on rally as momentum and sell flows are expectedly heavy.

July 11, 2000 Tuesday

MUSIC CORPORATION (MUSX). -  down Php0.01 to Php4.90.  Music Corporation filed reported  its consolidated statement of income ended December 1999 with a net loss of P218.76m. The market has largely discounted the news as these has been previously reported by the company in the past month's analyst briefing.  Music's losses are attributed to lower orders in 1999 due to the Y2k issue and on R&D costs incurred of its two new subsidiaries which are at its early stage of development.  Its major operating line - semiconductors and designer chips for networking are doing very well with an orderbook of at least USD$10m.  Major clients such as Cisco and Nortel Networks continues to enjoy brisk revenue sales which downplays threat of a cyclical downturn in semiconductor sales.  Expect operational losses to narrow down this year but full recovery is likely by 2001.  MARKET SCAN and PRICE ACTION.  The loss reported today is a non-event and is largely discounted! Investors should now anticipate positive reports from the firm from hereon particularly on new orders and lower bottomline losses.  Disappointment on the delayed listing of Music.com in Nasdaq has been widely announced and any market improvement in the US tech market status will significantly regain investor confidence on the stock.  Profit turnaround for this year remains possible with added non-recurring forex gains.  Foreign activity on the stock today is net neutral with the presence of foreign buyers at current levels reflecting some confidence.

METRO PACIFIC CORPORATION (MPC) - up Php0.05 to Php0.70.  Surprising price surge today was stirred by an unusual buying from some foreign brokers.  Recent macro and corporate developments have little prospects to offer to excite the investment public.  MPC's property gains greater saleability given lower interest rates and higher foreign exchange (for Pacific Plaza and Bonifacio Ridge which is high-end projects targetting the multinational firm/investor  market). We are anticipating MPC to dispose its non-property subsidiaries namely Metrovet and Steniel Packaging within the year.  Upside issues can come from: a) potential win to bid another property block in Ft. Bonifacio slated for entertainment, b)  100% sale of Pacific Plaza and  strong sales for its Bonifacio Ridge upscale property project, and c) Landco's operational progress in the development and sale of its Batangas resort projects (Costa de Madra and Batulao Woodlands) and targeted memorial parks.  Its sale of its PLDT stake remains just a speculation but this is likely if it needs to raise cash to win its bid for the Ft. Bonifacio recreation/entertainment site. MARKET SCAN and PRICE ACTION.  MPC is rated a LONG TERM BUY.  Investors still await its full return as a focused property firm but the currenty property sector's cyclical slump is unlikely to generate strong investor preference.  Relative valuation suggest an accumulation as it trades at a cheap price to book multiple of 0.37x.  Next immediate price resistance is at Php0.76 while immediate price support is at Php0.65/0.62.  Elliot wave rebound on break of 0.76 is a minimum 0.83 with the next fibonacci target viewed at 0.88/0.95.

BELLE CORPORATION (BEL) - unchanged at Php1.04.  Belle reported  a net loss of Php114.5m for 1Q2000.  Belle recorded operational profits of Php168m but was negated by losses from its Philcom and gaiming businesses.  Aside from the non-preference of investors to property firms, recent indications of another board squabble is further keeping investors at bay.  Consensus market recommendation remains an AVOID.  MARKET SCAN and PRICE ACTION.  Price volatility remains low with the recent 12day trading keeping BEL locked at a tight range of Php0.99-1.04.  Longterm momentum signals show an oversold status but breakout signals remains to be seen.  Key resistance at 1.14/1.24 with price support viewed at 0.99/0.91.  A bullish scenario comes on a breakout at 1.04 from its bullish wedge pattern with an upside immediate target at 1.18.

DMCI HOLDINGS (DMC) - up Php0.01 to Php0.56.  DMC reported a net loss of Php64.6m in 1Q2000.  DMC's focused operations in the property sector continues to suffer with no new projects at hand. Despite recording gains from its 6 projects the past three years, heavy losses from its subsidiary continue to erode gains.  DMCI's FY1999 profit of Php150m is the lowest in the company's history.  Recovery hopes still remains unlikely over the near-term.  MARKET SCAN and PRICE ACTION.  Relatively illiquid stock with record share price lows set at Php0.36.  Near-term trend is bearish towards a test of support at Php0.46.  Technical reversal is due with momentum entering oversold status.  Breakout signal remains unclear at key resistance at Php0.71.  Technical mediumterm upmove targets points to Php0.91.

UNIWIDE HOLDINGS (UW) - up Php0.02 at Php0.51.  News reports validated rumors that the approval of the rehabilation plan and the entry of its strategic partner- Casino is forthcoming.  News focused on the rumored approval of Ayala Corporation to allow the receivership committee to finalize the rehabilitation plan with Casino infusing US$100m in fresh equity to bankroll UW's operational recovery.  MARKET SCAN and PRICE ACTION.  Buyers interest were largely from local investors.  Key breakout price is at Php0.54 with minor resistance viewed at 0.58/0.67 with its key fibonacci targets at 0.59/0.64.  Momentum indicators are toppish which requires a strong volume on higher price to confirm the breakout thrust.

FILINVEST LAND INC. (FLI) - up Php0.06 to Php2.08.  FLI is favored as a key beneficiary in the government's prime target to build 350,000 mass housing units this year.  Recent developments see no quick progress in attaining the goal with merely 15,000 units allegedly under construction.  HUDCC and CREBA are still at odds over the progress of the mass housing plan. Recent breakdown of mass housing units granted only reflects 6 projects of 924 units approved with FLI.  MARKET SCAN and PRICE ACTION.  FLI's contribution of only 924 units is worrisome.  Optimism points on HUDCC's housing grants for FLI which it has not yet reported.  Despite the actual status, foreign and domestic buy flows continues to increase on FLI.  If the price is to be the gauge, then it must be true that FLI is due to report its mass housing backlog from HUDCC soon.  Recent price breakout at 2.06 points to a minor price resistance at a price gap at 2.18/2.24 with 2.45 as its key fibonacci target.  Immediate key price support is 1.84.  Momentum is toppish which warrants a sell on rally towards the 2.18-2.24 nearterm target.

July 10, 2000 Monday

Globe Telecoms (GLO) - unchanged at Php15.25.  Globe confirmed to the PSE a news report citing a programmed US$800 to US$1b capital expenditure of Globe for its telecom operations.  Globe's announcement came from the breakfast meeting  last friday of NTC Commissioner J. Santiago with Singapore Telecom's CEO Lee Hsien Yang, Ayala Corp's. J.Ayala and Deutche Telecom for ASIA CEO Mr. A. Haas.  Globe is also pressing NTC to renew the license of Islacom which failed to meet the 700,000 land line target.  MARKET SCAN and PRICE ACTION.  GLO's trade activity slowed today to 94,800 as against last week's average turnover of 147,657.  Largely local participation was evident with last week's major buyer ING was nowhere in today's trade.  The absence of a followthrough foreign buying and its significant rise from Php10 last March2000 casts doubt of another strong price surge from current levels.  Key resistance is at Php16.25.   GLO's share price has been been below Php16.25 since 1995.  Price support is minor at Php15.0 with key support still pegged at Php13.50.  GLO is rated LONG TERM BUY.

Philippine National Bank (PNB) - up Php0.50 to P57.50; The WB-IMF representatives was quoted willing to allow the national government to let its stake in PNB to get diluted in case the capital hike call is approved.  The national government's stake of 30% is set for bidding on July 19th with 3 interested bidders.  MARKET SCAN and PRICE ACTION. Sellers still dominated by foreign brokers namely ING, HSBC and SG which altogether accounted for 93% of today's turnover.  These three brokers have been net sellers for the past month and is the major overhang in its trade activity.  With these sell orders still flowing despite the announce rebidding, there remains  a huge doubt towards the success of the bidding.  The lack of a long list of interested bidders and the programmed move for a capital call adds to the stock's overhang.  Market talks hints of Lucio Tan's group willingness and capacity to absorb the P10b capital hike target which will guarantee PNB's goal to regain market competitiveness.  Investors interest is unlikely to build up until the bidding and the capital hike program has been completed.  PNB is rated AVOID given the aforementioned overhang but offers a HIGH RISK HIGH REWARD factor if the floor bid price is pegged at Php85/share. Risk is still towards the audited book value of Php60/share. Record share price low is at Php54.50 and the recent 4day rally remain subject.  Next key resistance is at Php60/64.50.

Metrobank (MBT) - down Php7.0 to Php192.00;  MBT's share price now slumped to a 1.5yr low and is attributed to its 1:10 pre-emptive rights offer due July17th to July28th at Php160.0 per share.  Foreign selling dominated today's selloff with UBS, ING and Regis accounting for 74% of sellers.  MARKET and PRICE ACTION.  MBT remains a rated a LONGTERM BUY given its dominance in the banking sector.   However, investors anticipate further share price pressure given the slump in loan growth, merger costs and an overhang from its qualified audit certification and the upcoming rights offer. MBT's downmove break of support at Php193 marks an entry in its freefall zone in 1998 that bottomed-out at Php110 level.  Key fibonacci targets has been achieved which warrants an accumulation tact as the ongoing price decline and likely share price recovery is due to progress at a faster rate. MBT's momentum is oversold although further consolidation is necessary to warrant an MA divergence.  Minor support is pegged at 191 with the next levels at 187/134.  MBT's price to book value is at a low 1.3x relative to BPI's 2.1x.

Ayala Corporation (AC) - up Php0.20 to Php8.20; The 20% stock dividend with exdate on July24th continues is keeping its share price firm.  Date payable is set for August 14th! AC's breakout price is pegged at 8.55 but its relatively pricey price-bk ratio of 2x is pushing other conglomerates such as Benpres Corp. (BPC) to firmer price levels.  BPC has a comparative price-bk of 0.8x!

July 7, 2000 Friday

PLDT (TEL)  - up Php10.0 to Php800.0.  PLDT’s subsidiary Smart Communications is believed to block the sale of the 40% stake of Cable & Wireless at ETPI to Digitel.  The reported sale price is convincingly low and Smart can invoke its right of first refusal as it is one of the major shareholders of the firm.  Although industrywatchers see no spectacular profit benefit for PLDT to increase its stake in ETPI, the longer PLDT delays the sale to Digitel, the greater it maintain its foothold in the telecom industry.  MARKET SCAN and PRICE ACTION.  PLDT’s share price closed to a 16day high with a straight 9day rally.  Net buyers were led by JF and SG while net sellers were led by ING in today’s trade.  Immediate resistance is at 815 with momentum rising towards its near-term oversold status.  A momentum break at 815 points to a fibonacci target at 835 and with immediate resistance at 870.  Weekly charts continues to be bullish for a breakout at 815 but recent decline in trade activity points to a near-term consolidative risk with 730/740 as a pullback target.  Near-term momentum indicators show no apparent divergence to price at current levels which benefits the medium-term bullish cycle.  Any surge in trade activity on price weakness hints of downturn test of 730/740 level.  Aggressive reentry warranted below 740.

Ayala Corp. (AC) – unchanged at Php8.0.  AC announced that the ex-date of its 20% stock dividend is July 18 with record date set on July 24 and payable 15days after.  AC’s share price action after the dividend payable date remains parallel to market activity.  Price history therefore show no sell-off trend after the dividend distribution. MARKET SCAN and PRICE ACTION:  AC’s recent new high at 8.20 reflects a likely bullish wedge breakout with 8.90 as the upmove price objective.  Recent price history points to 8.70 and 9.10 as the next price resistance target.  Worrisome in buy flows review is a net foreign selling activity today albeit on modest volume.  Immediate price support is at 7.70 – a break of which offers a key price support at 7.20.  AC is rated LONG-TERM BUY.  Fundamental watch is directed towards the release of the retail trade bill guidelines which will determine if its subsidiary – Makro Pilipinas will be allowed to pursue retail operations.

Philweb (WEB) – up Php0.01 to Php0.135.  Corporate insiders downplayed investors concerns that a non-revenue agreement was the net impact of its MOU with CBCP to form broad based Internet Partnership.  Philweb did not specify the rate agreement but rumors point to a revenue sharing agreement that will effectively increase Philweb’s line utilization rate.  Philweb’s Chair is in Europe this week which stirs speculation of another network partnership. MARKET SCAN and PRICE ACTION.  Today’s share price upmove reflects a short 2day price recovery from its downtrend from 0.185 to 0.115.  Momentum signals does not yet confirm a trend reversal but WEB’s oversold status points to a recovery target to 0.140-0.160.  The relatively low turnover volume on WEB show a weak bias for a strong price rally from its current oversold status.  Today’s trading volume accounted for 34% of total trade for the week. Further increase in trade activity is needed to impart a bullish bias.  The most optimistic scenario comes from a near-term momentum-price divergence that points to 0.0105 as a trend low given a price-momentum divergence with its recent low at 0.0115. Any market momentum recovery past 0.160 puts the medium-term trend objective towards a price gap at 0.235-0.260 with resistance at 0.280. On the other hand, an underlying bearish trend remains evident with its moving averages (MA) now at record lows.  A renewed downmove past 0.0115 weakens support at 0.105 with the next immediate objective at 0.90.

July 6, 2000 Thursday

Petron Corporation (PCOR) – down P0.02 to P1.36.  The reported under-recovery in oil pump prices and its reported P700m estimated operating loss in 1H2000 has steadily pinned down its share prices near its record low at P1.34.  Daily losses due to the under-recovery and likely longer delays for another oil price hike points to further profit losses in 3Q2000.  MARKET SCAN and PRICE ACTION.  PCOR remains a rated SELL/AVOID as fundamentals warrants it.  Domestic nor foreign interest towards the stock is unlikely to be regained given the political pressures against further oil price increases.  Record share price low is at P1.34 and weak interest on the stock doesn’t guarantee any price support.  Breakout price remains high at its immediate price resistance at P1.58.

Filinvest Land Inc. (FLI) – up P0.04 to P1.96.  FLI is widely accepted as one of the project developer beneficiaries of the governments mass housing program.  Although CREBA and the HUDCC remains at odds towards the fulfillment of President Estrada’s mass housing target, focused efforts to resolve the differences remains a top priority since mass housing is  the major program of the administration.  Even without the new order, FLI continues to maintain its profitability.  FLI registered a 6% profit growth in 1Q2000 at P200m from P186m in 4Q1999.  MARKET SCAN and PRICE ACTION.  Recent share price volatility remains low similar to the phisix.   Momentum remains neutral but its key uptrend pattern remains intact towards a price breakout at 2.04 with P2.46 as the next fibonacci upmove objective.  Immediate price support levels at 1.84/1.78 with major support still pegged at P1.60.  FLI remains a rated LONGTERM BUY

July 5, 2000 Wednesday

Ionics Circuits (ION) – up 0.45 to 10.25.  Ionics EMS – a listed subsidiary in Singapore was suspended for today’s trading pending a corporate announcement.  Ionics is set to give an analyst briefing tomorrow July6th.  Share price in Singapore has surged 43% from its low last Friday June30th to its trading high at 0.56 prior to its trading halt this morning.  Corporate news leak points to huge order of Philips Electronics for readable/writeable CDs with targeted total revenues of at least US$650m.  Ionics will therefore announce an added capital expenditure to expand its manufacturing plant to accommodate the order. Ionics may regain investor interest behind stronger profitability prospects.  Ionics registered an above-market profit growth of 25% in 1Q2000 and consensus profit growth estimate of  75% to 110% this year.  MARKET SCAN and PRICE ACTION.  Peso comparative price to Singapore price of 0.51 is P12.96.  Although recent price history of the local share price never approximated the Singapore listed price.  Buyers are mostly from local brokers.  Rating is a LONG TERM BUY.  A possible triangle price pattern breakout is in the offing at its recent high of 10.50.  Immediate resistance at 11.25 with the next fibonacci upmove target seen at 12.0. Momentum is rising but still on neutral zone.  Immediate minor support levels are at 9.7/9.30.  Further monitoring of the Singapore listed subsidiary is needed to confirm further bullishness on the stock. Record high of the Singapore listed subsidiary translates to Php15.85 which was recorded a week after its Singapore IPO last February2000.

Metrobank (MBT) – down 2.0 to 200.  The Central Bank cleared MBT of misinforming the public in its financial statements.  The issue raised pertains to its auditors issuance of a qualified report stating MBT did not conform to GAAP standards.  MARKET SCAN and PRICE ACTION: Trade activity on MBT remains low with no surprising foreign brokers dominating the sell-offs today.  MBT remains a rated LONGTERM BUY.  Immediate price resistance levels at 209/222. Minor price support viewed at 197/194.  Near-term sentiment on the issue remains weak due to sluggish loan growth and fears of higher than expected consolidation cost from its targeted merger with Solidbank.

SPI Technologies (SPI) – down 0.50 to 7.20.  SPI’s share price steadily declined for the past 14weeks from its high at 13.25.  Overall weakness is attributed to the company’s issuance of a rights offering at a price of 8.55/share announced on 6 June 2000. SPI plans to utilize the funds to complete the development of its E-Telecare call center joint venture project, the installation of a second call center site and for potential acquisition of similar businesses in Europe and the U.S, added funds for overseas marketing, and to refinance short-term bank debt . SPI already registered a profit turnaround in 1Q2000 with an income of P14.5m compared to FY1999 profit loss of P185m.  SPI’s 2Q2000 performance remains firm with company officials hinting of a slightly better performance than the first quarter.  MARKET SCAN and PRICE ACTION.   SPI’s share price is now on a 7month low at  7.20.  Added foreign selling was noted today with noted sell transactions from JF.  Minor price support viewed at 6.90/6.60.  Immediate key resistance seen at 7.9/8.10.  Momentum indicators reflect oversold status with a progressing momentum-price divergence.  SPI is rated a HOLD.  Trading buy signals now warrant reentry below 7.20.
 

July 4, 2000 Tuesday

Meralco (MERB) – down 0.50 to 62.50 as the targeted power rate hike will be further delayed.  The Solicitor General has recommended to the Energy Regulatory Board to ask Meralco to revise its petition for its rate hike since the formula on return on rate base has not been cleared by the Supreme Court.  The delay in the ERB’s grant for the rate hike is largely discounted given the government’s willful political interest to enhance it public image by opposing any rate increase.  Meralco officials remain firm that it will continuously work through the bureaucracy in order to get the inevitable rate hike.  Further delays will definitely cut into Meralco’s profitability but most local research houses has treated any rate hike as a bonus on its baseline profit estimates.  MARKET SCAN and PRICE ACTION:  MERB is rated ACCUMULATE at current levels as most of the negative issues affecting the stock has been all filtered into the price.  Any weakness is largely on a parallel market performance.  Immediate price support is at 61.50 with momentum steadily declining.  A downmove break of 61.50 puts a test to 59.50/54.50.  Aggressive reentry is warranted below 59.50.  Foreign interest in Meralco remains strong given its added business strength expected from the revised power bill now pending in Congress.  Hopes are pinned that Congress will pass the bill on its special sessions due July 17-19th.  Such strong market interest on MERB casts doubt of a likelihood of a huge share price decline over the next few weeks.  Key support at 59.50/54.50 looks firm.  Minor breakout price target is at 65.50.  A possible triangle price pattern break is due soon with a momentum risk for a minor price decline.  Volume activity in the recent sell-off remains low which hints of  short downside with hopes of a fast share price recovery.  Top foreign buyers for the past month were ING and CL; net sellers were Merrill and Morgan

Ayala Corporation (AC) – up 0.10 to 8.0 on speculations of increased business potential if wholesaler subsidiary –Makro Pilipinas gets to purchase choice lots owned by debt-laden Uniwide.  News reports cited the strong interest of AC over selected prime lots to be sold by the creditors group handling Uniwide.  AC officials never gave any comment on the issue.  Makro Pilipinas is geared to expand its store network but not aggressively given the economic environment.  The Company awaits the release of the detailed guidelines of the retail liberalization act if  it will be allowed to pursue retail operations.  The guidelines is due to be released prior to the investment mission organized by Trade Secretary M. Roxas in line with President Estrada’s trip to the US on July 24th.  The government is geared to open retailing as much as possible but lobby efforts remain strong.  There is a strong hope for the guidelines on retailing to favor Makro!  MARKET SCAN and PRICE ACTION:  AC’s share price is testing key resistance at 8.10.  Recent price consolidation (7.70-8.0) has triggered a momentum breakout at AC’s weekly chart. This points to 8.90 as the next immediate price target.  Near-term selloffs remains within range with price support at 7.70.  AC is rated a BUY.  Foreign and domestic buying has been largely aggressive when AC declined at 7.70.  We expect follow through interest to favor AC if a price breakout occurs.
 
 

July 3, 2000 Monday
 

Uniwide Holdings (UW) – up 0.03 to 0.51. Trade interest on UW gain ground to its biggest turnover since Mar30th on speculations that the government approval on the capital infusion/strategic partnership  of UW with Casino Guichard-Perrachon will be released early this week.  The likely announcement is well anticipated given the government-appointed management group’s approval of the debt rehabilitation plan last June.  Market watchers find it fit to anticipate an early approval of the plan since the two creditors (AlliedBank and PNB) is forced to approve of the rehab plan since PNB’s credit risk with UW has been discounted in its ongoing rehab program. Market speculators anticipate the ruling prior to President Estrada’s departure which will also include an investment mission for major US retail establishments to establish presence in the country.  MARKET & PRICE ACTION:  Near-term price trend is moving up with momentum. Price resistance at 0.54/0.59/0.72; price support at 0.44/0.38 A convincing upmove break of 0.54 is necessary to confirm a renewed strong price rally past key resistance at 0.72 with minimum objective at 0.85.  A price failure scenario comes to form on a downmove break of 0.44 which renews its 3wave downmove risk for a retest of  the 0.35 level.  Bias remains on an upmove break given the momentum buildup and a possible MA crossover to validate a BUY signal.

Metrobank (MBT) – unchanged at 202.00; Metrobank’s auditor, SGV, released a qualified endorsement of its financial statement on account of the bank’s treatment of bad debts amounting to P6.11b while profit statements only realized 29% of such or P1.8b.  MBT recognized the balance against its capital which is still within practical considerations but contrary to GAAP guidelines.  If realized fully, MBT will report a mere profit of P197m as against the reported net profit of P3.1b at end –1999. MBT’s reporting preference is directed to stem-of any public disappointment that may be blow out of proportion given the market’s active rumor mill which had unprecedent damages as experienced by IBank.  MARKET & PRICE ACTION:  Recent price consolidation (193-209) attributed to its pre-emptive rights offering with an ex-date last July28th. Immediate price support at 197/194; resistance at 209/221.  MBT remains a rated BUY with a likely Market Perform near-term outlook.  Weak interest on the finance sector given the slump in loan demand, an expected weak 2Qprofit report,  and MBT’s consolidation costs (from its ongoing merger with Solidbank) is the underlying overhang.

Equitable Bank (EBC) – down 0.5 to 43.50; EBC’s share price hit a 20month record low on strong market expectations of a rise in its NPL! Added concern on reduced profitability comes from its exposure (at least P100m) to the ASB Group and the likely delay in its disposal in its hoard of treasury shares.  Loss of confidence in EBC as reflected in its share price is deemed difficult to overcome given the financial market’s overall weakness.  Key valuations point to EBC among the severely undervalued stock (huge 30-35% discount to bookvalue) but the dearth in selling continues.  .  MARKET & PRICE ACTION:  Momentum still declining at oversold status but no reversal signals has been triggered yet.  Price reversal pressure builds up with the downmove to 43.50 translates to a 78% downward retracement of its Sept98 to July99 price rally (24.78 to 113.0).  A free-fall window marks the range from 24.78 to 43.50.  Key resistance at 53.0 level.  Accumulate for LT Recovery is the most valid tact.  Minor resistance at 47.5.  Top sellers today were foreign brokers – CL/ING/SG
 

June 30, 2000 Friday

Ayala Land (ALI)  - unchanged at 5.50. Ayala officials issued a statement confirming newsreports it received its prequalification approval for the bidding of the 55ha Ft. Bonifacio property. Details of its development remains on the drawing board.  ALI's share price has steadily declined for 11 straight trading days from its high at 6.20 (a 12% price correction). Immediate price support is pegged at 5.30/5.10 but momentum signals are now at oversold status.  LONG-TERM BUY recommendation is maintained.  Industry remains threatened by further decline in  retail sales due to the high inflation -low employment economic state.  Accumulation window recommended below 5.30.  Buyers largely attributed to local institutions.  Net seller is presumably foreign led by INGBarings

PNB - unchanged at 56.50.  PNB Chair L. Tan reported plans to subscribe to the planned rights offering to increase PNB's capital to P10b.  The report thwarts market speculation that there are no willing takers for the rights offering wherein bidder-Ms. L. Nicolas-Lewis intends to get majority control via the rights offering.  PNB also reported the sale of its stake in Maybank the Malayan Banking Bhd.  PNB's fundamentals remains doubtful for a quick recovery.  However, a HIGH RISK HIGH REWARD opportunity exist.  If PNB moves to approve the cut in its par value to P60/share,  then it is unlikely that the rights will be lower than P60/share (which is higher than current market price).  Also noteworthy for parallel valuation is a low 1.7x book value purchase (from Metrobanks purchase of Philbank) which is P102 for PNB if the book is adjusted to P60/share.  Longterm recovery value for an industry average 2.3x price to book ratio puts the upside target at 138/share. HSBC and SG led sellers and accounted for 80% of total transaction.  Buyers were largely local investors!

Digitel (DGTL)  - up 0.02 to 0.74. Digitel reported its acquisition of  a 40% stake in Eastern Telecommunications Phils. Inc. (ETPI) owned by Cable & Wireless for U$18m.  Digitel has lagged the industry in the wireless development but still boast of hopes with its new convergence business plan backed by its fixed line network which is the second biggest in the country.  Digitel can utilize ETPI for its highband services necessary to support its convergence of business service.  DGTL is also another classic HIGH RISK HIGH REWARD opportunity as its all-time share price record low is at 0.70/share.  Digitel reported a turnaround in 1Q2000 with a profit of P1m - a notable improvement from a P77m loss registered in 2H1999.  Fundamental play for the telecoms is maintained for PLDT and GLO but further business improvements qualify DGTL for a  SPECULATIVE BUY among small cap new technology business.   Resistance levels are seen at 0.75/0.80/0.94.  Pressure for a price recovery is due as momentum signals are at oversold  status.

SMC - unchanged at 52.0; SMCB - up 0.50 to 53.50; SMC reported a 29% and 10% growth in profit and revenues for the first 5months.   The report confirms a continuing improvement from a 25% and 8% growth in profit and revenues for the first 4months.  Beer sales is tagged a defensive play for the economic crisis.  Share prices remains firm with SMCB's share price uptick today reflects a new 2.5month high.  Market watchers attribute the firm price of SMCB on the steady accumulation of SMC Chair E. Cojuangco in order to further guarantee its control of SMCB in case it fails to purchase the national government's stake.  SMC remains a rated LONGTERM BUY with a defensive posture.  Price resistance is pegged at  54/56/59 with price support at 51.50/48.0.  Aggressive entry in the stock is recommended near 51.50 .  Speculative play points to a possible gradual price rally if the government plans to sell its stake in SMC within the year.   The continuing heavy transaction on SMCB heightens the possibility of an upside potential since the selling pressure has been largely absolved.  E.Cojuangco's group is also speculated to push the share price in order to make the government sale unattractive to other groups other than theirs.  Other news reports pointing to a likely tax hike for liquor has already been thwarted by Congress Chair M Villar as the major parties have already agreed not to impose further tax hike.

ABS- up 2.50 to 53.50; ABSP - up 2.50 to 53.50; ABS reported that its internet unit is willing to delay its public offering given the prevailing weak interest among technology stocks.  However, focus of interest on ABS is its strong new economy play with a firm underlying dominant media operations.  ABS is set to report further improvements in profits as initial indications on airtime minutes sold has increased from a mere 2% growth in the first quarter to 10% for the first 5months.  Share price rally has been steady for the past 3weeks which outclassed the market's index.  Foreign buyers today were led by CL, WICARR and JF. ABSP's price support levels are at 50.50/48.50.  Momentum is toppish with price resistance 54.50/58.0/67.

June 29,2000 Thursday

MEGAWORLD - UP 0.073 TO 0.94; EX-STOCK TODAY FOR ITS 50% STOCK DIVIDEND! Despite the ex-stock, share price continued its upmove! top brokerbuyer highlights Megaworld as the top sales grosser among local developers since the crisis; it also boast of a new-economy theme advantage given its IT zone;top broker is OCBC - net buyer for 59% of total transactions; unverified market rumors point to OCBC as the broker-dealer for an Asian investment group that will takeover BW via the 70% stake of Megaworld; today's price is the highest since Jan7th; price resistance is pegged at 1.0 (Meg's highest price for the year!); OCBC is a net buyer since its run-up from its y2000 price low at 0.55

PNB - down 0.50 to 56.50; the steady share price decline of PNB stems from thepar value adjustment and the perceived failure of the government to sell its 30% stake in PNB; local investors find no favor towards the financial sector; newsreports cited Loida Nicolas-Lewis as one of the continuing serious bidder for PNB after the auction was declared a failure; Ms. Nicolas-Lewis intends toget majority stake by acquiring the proxies of independent shareholders! Latebreaking news comes from the government's announcement of its willingness to take over PNB if its raises its capital to P10B by September; The national government gave such commitment to the IMF and World Bank to facilitate its loan facility worth $321m; record low is pegged at 55/share.

MERB - down 0.50 to 64.50; foreign selling led by WICARR and MERRILL; near-term bearish sentiment on Meralco comes from overall pessimism that the national government will not likely allow Meralco to increase in effective power rates; the upcoming petrol price hike is damaging enough to the public and another power rate hike can worsen public outcry; immediate price support levels are 64/62.50; target breakout price over the interim is 65.50/67

AC - up 0.2 to 7.90; AC led all index linked stocks but the up move today was surprising as other listed subsidiaries - ALI and BPI closed lower; today'sintraday high at 8.0 was the first attempt after staying at 7.90-7.70 for the past 5 trading days; price breakout is at 8.10; momentum is neutral but aggressive reentry still viewed below 7.40