September 21, 2000 Thursday

Ionics, Inc. (ION). Php13.25.   Reduced growth expectations for next generation consumer electronics which befell US-based manufacturers that triggered the recent downturn of the Nasdaq has effectively capped buying interest from new investors.  MARKET SCAN and PRICE ACTION.  Any slack in global demand consumer electronic trends will not directly impact Ionics, that is – not yet.  Order flows are at hand to secure profitability and growth until Y2002 which is highlighted by the US$1b manufacturing contract with Philips.  Highlights of the fundamental attractiveness of Ionics remains intact:  1) huge contract at hand to lift profit growth to nearly 300% in Y2001, 2) global advantage from its newfound expertise in flip chip technology, 3) its promising investment portfolio of new manufacturing technologies in Silicon Valley, and 4) relatively undervalued:  FY2001PER at 5.5x, P/Bk at 1.2x, and a market capitalization to revenue percentage at  a low 8%.  Market rating ranges from a BUY to OUTPERFORM.  Price pattern is trending higher.  Recent downtrend from 15.50 to a low at 13.0 has attained oversold momentum status.  Near-term price recovery is likely on several Elliot wave scenarios, including a wider correction pattern with 12/10.75 as its key risk levels.  Candlestick patterns offers several white bodies while volume flow analysis reflects a net outflow which supports a near-term bearish trend.  Immediate price support is at 13.0/11.75 with immediate resistance at 14.0/15.50.  A breakout at 15.50 offers a test of 16.50-17.70. (Recommended Trading Action: Accumulation zone seen below 13.5 towards fibonacci key support at 11.75; trading exit at 15.0-15.50; long term holders objective at 17.0).

September 20, 2000 Wednesday

Uniwide Holdings Inc. (UW). Php0.56. Relevant news update are as follows: 1) September 22 Stockholders Meeting will proceed, 2) 7 of 14 creditors have approved the rehab plan, and 3) legal pleadings are ongoing with Baxter Holdings Corp. – a creditor that sought court intervention for the recovery of its investments in the Company.  MARKET SCAN and PRICE ACTION.  Investors are widely anticipating corporate prospects based on the rehabilitation plan recommended by the SEC receivership committee.  The September 22 stockholders meeting will proceed with Casino representatives in attendance.  Company sources denied initial market speculation of Casino’s presentation during the stockholder’s meeting but the firm will definitely present its plans with the SEC and the creditor group on a different date and venue.  Casino and the receivership committee is committed to finalize plans ahead of the company’s aggressive relaunch in time for the Christmas shopping season.  Initial plans reflect a return to profitability after three years.  Market coverage on UW is expected to gradually develop anew after the approval of the rehab plan. Stock rating remains a Speculative Buy.   Price pattern reflects an intermediate bullish trend with near term trend suggesting a price correction.  Momentum is declining but has yet to reach oversold status to trigger recovery signals.  Candlestick patterns offered several bullish scenario from a white body while its Elliot wave reflects a progressive wave3 with the near-term downmove expected as intrawave4 with 0.43 as key support.  Another Elliot wave scenario hints of a wave2 of intrawave3 which offers a near-term upside towards 0.69-0.81 as long as 0.43 holds.   Near-term price support is at 0.50 with the next price support at a price gap at 0.45-0.47.  Immediate resistance at 0.60 seems weak with the next key resistance levels at 0.65/0.72. (Recommended Trading Action: Buy zone starts below 0.54 with a noted risk towards 0.45 level;  trading exit starts at 0.67 with major intermediate or long term objective at 0.81).

September 19, 2000 Tuesday

Filinvest Land Inc. (FLI).  Php1.36. Aside from the rising interest rate scenario and an extended property sector slump, investors are increasingly getting convinced that the government’s Php40b housing project will be significantly delayed due to the country’s ballooning fiscal deficit.   Since FLI also has not publicly confirmed any new mandate or contracts that will confirm its participation in the government’s ambitious mass housing program, investor anxiety has intensified.  MARKET SCAN and PRICE ACTION.  Contrary to market speculations or fears, our Company resources confirmed that there’s an ongoing 21,000 unit socialized housing project with HUDCC and that there are at least two (2) new contracts that have been negotiated with other government branches which the Company are not in liberty to disclose. Although the rise in key interest rates will definitely affect the affordability factor of the socialized housing program, the possible slowdown is deemed negligible as consensus socialized and low-cost housing completion by 2001 ranges from 4,000 to 5,250 units only.  This translates to a mere 6% to 8% of an assumed realistic 20% (or 70,000 units) of the government’s annual target of  350,000 in 5 years.  We remain confident that the key factors of market’s optimism on FLI (valuation reflects a share price of at least Php4.0 prior to Y2000) is intact and the Company is poised to benefit the most among other property counters. Likewise, the market expects the Estrada administration’s to fulfill its socialized housing program in order to gradually regain public support and confidence. FLI’s pertinent valuation remains attractive. Market rating is bullish from a Buy to Outperform with consensus PER at 6.2x for FY2000 and 5.0x for FY2001.  FLI is significantly a bargain at a 77% discount based on our modest NAV estimate of Php5.8 and at its P/Bk of 0.35x.  FLI’s price chart reflects a 4month consolidation at 1.28-2.10, with 1.28 the intermediate trend low from its straight downmove from 4.40.  So far, 1.28 seems an established bottom and the recent consolidation as a new phase.  Reversal signals have been triggered with price-momentum signals now showing a divergence.  Immediate price support is critically pegged at 1.30/1.28, but a breakdown at 1.28 showing the next fibonacci objective at 1.06.  Immediate resistance is at 1.48/1.60 with the next major trend objective to surpass 1.76 over the medium-term.  Candlestick patterns is bearish with a big black candle with indicative separating lines. Elliot scenario points to a near-term bottom for intrawave2 with the next recovery (intrawave3) set to surpass 1.76/2.10.  (Recommended Trading Action: Buy zone starts at current levels-1.36 with risk towards 1.30/1.28; trading exit is recommended at 1.60-1.76).
 

September 18,2000 Monday

PhilWeb Inc. (WEB). Php 0.105.  Market talks point the significant delay in Philweb’s operating program.  MARKET SCAN and PRICE ACTION.  Company sources confirmed the delay due to technical constraints which restricts the establishment of its Cybercafe. Its biggest network tie-up with CBCNet also is moving slowly with merely one Cybercafe operating contrary to its targeted 200 this year. It is therefore highly unlikely that Philweb will register a profit this year as claimed by its Chairman in its launching briefing to investors/analysts early this year.  However, Philweb is set to launch is money remittance services by October 1st.   So far, it is finalizing ties with Union Bank of the Philippines and Aboitiz Express as its remittance partner. Until its Cybercafe network is largely established, no revenue upsurge is expected for any of its new product/service  launches.  Philweb is rated highly speculative until newfound fundamental value emerges.  Global rating on ISP’s and tech stocks have significantly waned which has significantly reduced investor interest unto such issues.  Philweb’s price pattern is bearish and recently consolidating at a range of 0.975-0.135 with the recent down trend (0.135-0.10) set to test support at 0.975.  Volume analysis reflects a fake price action as the recent price upmove did not occur on higher trade turnover. Momentum is declining but has yet to reach oversold status.  A downmove break of 0.975 points to a fibonacci test of 0.850.  A bullish Elliot scenario if 0.975 holds firm, points to a gradual price recovery to break of 0.135 with 0.150 as its immediate target.  (Recommended Trading Action: Buy zone starts on oversold status test of 0.975, aggressive re-entry should be below 0.850; immediate exit is recommended at 0.125 with re-entry suggested on a breakout at 0.135 with 0.150 as the next exit target).

September 15, 2000 Friday

Manila Electric Company (MER/MERB). MER – Php58.0; MERB – Php57.50.  Available loans to plug the country’s fiscal deficit allows the government to slightly delay its privatization program.  Hence, the speculated rate hike grant prior to the government’s planned divestment of its stake in Meralco may be delayed further.  Such newfound market concern is contrary to what Meralco officials are expecting. Meralco remains positive that ERB acknowledged their predicament and is soon to grant their rate hike petition.  When asked if Meralco will accept a partial rate hike, corporate insiders commented that ERB almost always grants in full and if ever, this may be the first.  Although the market timing is indeed difficult, it is necessary given the increased cost of business and the RORB requirements which may be a factor for the IMF loan facility.  MARKET SCAN and PRICE ACTION.  Investors have long been disappointed to see the government delay its act on the rate hike petition.  However, fiscal budget deficit concerns and the government’s firm plan to divest in Meralco draws optimism that better yields are due if the rate hike is granted prior to the sale initially set for November-December this year.  A key overhang comes from foreign investors lack of interest since it is deemed vulnerable to political uncertainties considering the rate hike is politically unpopular. It is therefore a toss-up between granting the rate hike and proceeding with the divestment, or delaying the rate hike and its divestment plan to the extent allowable by the fiscal deficit.  Albeit the aforementioned rate hike overhang, MER is considerably cheap at a consensus FY2001PER at 16.4x (with optimism at 14x).  MERB’s price trend  is bearish but recovery signals have been triggered.  MERB is oversold and a momentum-price divergence is at hand.  Candlestick signals are however bearish with a long upper shadow following a gravestone doji.  Such situation however already discounts a mild risk from current levels since its recent volatility now awaits a trending or consolidation which may further increase likelihood for a price recovery.  Immediate support at 57 is critical with the next fibonacci support at 53.50.  Its record low this year at 52 still remains a firm support given the momentum divergence patterns which has been a valid indicator for MERB.  An Elliot wave scenario of a full intrawave2 of wave3 or a progressing waveC of wave2 marks a shallow risk and keeps 52 as an established bottom.  Both scenario offers a gradual yet firm impulse or recovery towards  a near-term 60-64 with a long-term break of 66 in sight and a minimum upmove objective towards 74.5. (Recommended Trading Action:  Buy zone starts at current levels – 57.5, towards risk at 53.5; immediate exit objective at 60-64; long-term hold will approximate next wave’s upmove  towards 66-74.50 )

September 14, 2000 Thursday

Ayala Land Inc. (ALI). Php4.80.  Key earnings sensitivity determinants have declined to warrant a lower rating.  These are: 1) higher interest rates, 2) lower personal consumption expenditure, 3) declining foreign capital flow, and 4) lower property asset values.  Higher interest rates and lower personal consumption expenditures will significantly hit revenues from its retail leases, while slumping overall country confidence will cut hotel income and target foreign retailers.  Likewise, market value of property assets due to an overextended property slump will reduce estimated NAV by 12%-15%.  MARKET SCAN and PRICE ACTION.  Lower valuation warnings cited are largely reasonable but  ALI’s share price decline from its recent intermediate trend top at 6.20 may be overdone.  ALI’s adjusted NAV estimated is 9.50 which reflects a steep discount of 49%.  IBES consensus average EPS of Php0.28 translates to a modest FY2001 PER at 17x.  ALI’s price pattern is trending lower setting an 18week low and may test the price gap at 4.45/4.50.  Momentum signals are already at oversold status while MFI signals now offers a divergence which means a price recovery is due.  So far, its key support at 4.0 seems a firm bottom.  Immediate price resistance is at 5.0 with the next resistance at 5.40.  Candlestick patterns are near-term bearish with a falling window and black crosses.  (Recommended Trading Action:  Buy zone starts at current levels - 4.80, towards risk at 4.45, and more aggressive re-entry is warranted towards key support at 4.0; immediate exit objective at 5.0-5.40; intermediate wave extension may be gradual on its new impulse objective at 6.10)

September 13, 2000 Wednesday

SM Prime Holdings. (Php4.85).  Lower consumer confidence and the new retail trade implementation rules has triggered fears that SMPH’s earnings growth will be more elusive.  MARKET SCAN and PRICE ACTION.  Although consumer confidence is indeed  reasonably slow with PCE reportedly flat at 3.2% in 2Q2000, other consumer confidence related surveys  (BW) reflects a slump particularly from lower expectations index.  Also, the IRR of the Retail Trade Liberalization Act (RTLA) is feared to bring stiffer competition which heightens market expectations that SMPH’s rating will be reduced.  Such fears have been well taken into account but recent company updates (July/August) reflected marginal downgrades with foreign houses still expecting a higher than consensus profit forecasts.  IBES consensus profit forecast is 12% and 15% for FY2000 and FY20001, respectively.  Most recent reports from top foreign houses reflect a downgrade to a profit growth of 21% and 10% for FY2000 and FY2001.  Market analysts defends the marginal downgrade on 1) a better-than expected 1H revenue, and 2) on observed preference of foreign retailers to seek partnership (rather than sole development and operation) which is beneficial for SMPH.  Even on a low 10% EPS growth for FY2001, SMPH’s FY20001PER is a modest 12.6x.  SMPH’s price is trending lower from its recent high at 5.60.  Momentum nears oversold status but still offers some room to decline further.  A bearish trend reversal signal was validated from yesterday’s break of its uptrend line with MA trend still showing  a downward momentum.  Candlestick pattern is near-term bearish from a big black candle formed from its recent high.  Key support is at 4.70 with 4.40 as the next fibonacci target.  A less bearish Elliot scenario offers an intrawave2 test of 4.7 but the next intermediate trend will be a gradual rally to test 5.60 with  5.90 as the minimum objective.  (Recommended Trading Action:  Buy zone starts at current levels towards risk at 4.70/4.40, and more aggressive re-entry starts below 4.70 with immediate exit objective at 5.20; wave extension towards the break of 5.60 is possible with long-term holders objective at 5.90-6.20)

September 12, 2000 Tuesday

Ionics Circuits, Inc.(ION) – Php14.0. Ionics Circuits Inc., one of the country's biggest  semi-conductor manufacturing firm, famous for its $1-billion contract with Royal Philips Electronics of Netherlands is on-track towards its US$50m production plant preparation.  Corporate insiders find no major newsworthy item to report to the market, except for the global strength of the US dollar which is deemed positive for Asian exporters and as a demand booster for luxury electronics.  MARKET SCAN and PRICE ACTION.  Share price dropped to a 15day low today at 14.0, which is lower than its 1month average transaction price of 14.28.  Market rating has remained a BUY and not one of the top houses has rerated Ionics, which meant a consensus absence of any corporate wariness.  Barra Global Estimates suggest a FY2000PER at 14.3x, and an FY2001PER at 7.1x.  As such, recent weakness is largely attributed to the market’s overall weakness.  Price pattern is near-term bearish with the recent downturn occurring on lower average transaction volume.  As such, no panic signal has emerged.  Immediate price support is a price gap set at 13.50-13.75 with key support at 12.50.  An Elliot scenario offers two distinct near-term bearish scenario: a 3wave downmove progress for a likely intrawave4, or a waveA.  Both offers a buy on weakness with the latter suggesting an early exit on a retest or break of 15.50.  Candlestick pattern is a big black candle, which is bearish coming from a recent high (15.50).  Momentum signals are nearing oversold status but has yet to set an intermediate bottom.  Medium-term and Long-term outlook is therefore northbound which supports a buy on weakness.  (Recommended Trading Action:  Buy zone starts below 13.50, and more aggressive towards risk at key support at 12.50; nearterm exit objective is at 15.50-16.75)

September 11, 2000 Monday

Globe Telecoms, Inc. (GLO) – Php890.  Market estimates of Globe’s ARPU (average revenue per subscriber) for FY2001 is likely to be reduced (from previous estimates) on account of the anticipated slowdown in subscriber growth rate and on competitive pressures from PLDT’s launch of its prepaid fixed line.   MARKET SCAN and PRICE ACTION.  Analysts polled had Globe’s fair market value ranges from 930 to 1025 which includes Islacom.  Albeit the strong price rally due to value driven growth and trading optimism ahead of the PDR listing has intensified a comparable shift to PLDT and a second-look into DGTL.  Although market rating has been a unanimous BUY to Outperform, select houses are now bracing for a lower rerating to Neutral given the strong price rally and the anticipated end of the transaction crosses.   GLO’s share price has steadily firmed setting new record high to reflect newfound optimism and quality vis a vis its peers.  Today’s net foreign buying marked the highest (Php44m) which may either reflect the near-end of the transaction crosses or provide a basis of strong support as its share price rise further. Rumors remains strong that foreign orders are at hand below 850 level.  Momentum is overbought, toppish and a momentum divergence has been set today.  Technical pressures to slightly pull back are highly warranted with key price support levels at 860/835. Upside potential from the recent breakout is a fibonacci target at 1110.  (Recommended Trading Action:  Sell on strength; accumulate below 860 with intermediate pull-back risk warranted at 760)

BW Resources / Fairmont Holdings (BW).  Php2.55.  Speculations towards the cancellation of the proposed rights offer are deemed unlikely unless the SEC indefinitely maintains inaction towards its planned business restructuring.   MARKET SCAN and PRICE ACTION.  BW remains a highly speculative issue wherein not a single brokerage house has attempted to fundamentally review its business plan after its fiasco last year.  The major overhang aside from its questionable fundamentals (or absence thereof) is the proposed rights offer and on its capability to entice a new investor group.  Albeit its planned wider business scope to include exposure in e-commerce business, no significant price action has been triggered for the reversal.  Market talk continue to downplay certainty of getting a new investor group given possible renewed damage to the image of the President – on account of its personal involvement with BW’s Dante Tan.  Price action remains within the bearish trend unless a trend breakout occurs at 3.30.  Momentum is rising and offers some room to test 3.90, a likelihood given its recent break of price resistance at 3.10.  Immediate price support is at 2.26 with its recent record low at 2.16 as a key support.  A break of 2.16 imparts a fibonacci support at 1.80.  BW reflected a 2day bar upmove from its recent low at 2.16.  Since dropping from 7.0, BW’s longest price rally on a price recovery is 4days, a trading benchmark for speculative interest.  A candlestick’s pattern of a big black candle near key support still warrants a bearish trend.  Lower volume turnover on the recent price uptick to 3.10 also seems a fake recovery as it continue to suggest of greater sell pressure on marginal price increases.  (Recommended Trading Action:  Sell at current levels and re-asses entry at 2.26 to 2.16;  buy on momentum break of 3.30 with 3.90 as exit objective)

September 8, 2000 Friday

Philippine National Bank (PNB). Php50.50. Details of the 5:6 Pre-Emptive Rights Offering
Offer Ratio: five rights for every six
Offer Price: Php60.0
Record Date:  September 15
ExDate: September 11
Offer Period: September 18-29
Payment Terms: Full payment upon subscription
 Warrants Offering: One warrant for every one rights share subscribed
No. of Warrants: 171.85m
Cost of Warrants:  Free of Charge
Exercise Period: Listing up to 5 years
Exercise ratio: one share per one warrant
Exercise Price: Php60/share

MARKET SCAN and PRICE ACTION.  PNB’s share price fell to a 10day record low on seemingly lack of interest towards the rights offer.  PNB is indeed least preferred among the banking issues and market rating is predominantly a SELL, Underperform or SHIFT.  PNB expects an FY2000 net loss of Php561m with its book value set to increase from Php67.5 to Php84.8 (post-rights).  On a trading perspective, PNB is worth a second-look based on a) a hopeful profit recovery, b) hefty discount to book value, c) the bonus warrants, and d) positive liquidity pressure.  The proceeds of the rights offer worth Php10.2b will greatly reduce PNB’s interest dues, enhance effective margins, and improve profitability, since an 11% interest rate provides Php1.22b in added interest income. PNB’s record share price low at Php41.0 translates to a hefty 39% discount to pre-rights book value (Php67.5). At its post-rights book value of Php84.8, the 39% discount translates to Php51.70.  Since we expect sentiment towards PNB to improve after the rights offer, despite the weak interest the 39% discount to book value may be a floor price-bk valuation.  A modest 20% increase in the P/Bk value discount translates to a target price of Php67.8.  A return to profitability in FY2001 to nearly Php1.5b reflects a forward PER of 12.7x.  Likewise, the sell-off ahead of the rights offer will effectively reduce the overhang which can easily drive share prices higher – a usual market post-rights objective.  Therefore, let us not discount the possibility of a trading potential that certain market forces will exert effort to drive share prices higher prior to record-date and beyond.  PNB’s price trend reflects a marginal consolidation (Php41 to 56.50) for the past six weeks after the record fall to Php41.  Key support is pegged at 45.0 with a likely Elliot wave scenario of a wave3 in progress set to break immediate resistance at 59.50 and test 61.0.  The downtrend channel break also offers an upside potential towards an intermediate test of 65-72.  Momentum is near oversold status but no major reversal signal has been triggered yet.  (Recommended Trading Action:  BUY at current levels with expected shallow risk at 45; exit objective towards 61-72)

September 7, 2000 Thursday

Belle Corporation (BEL) -  Php1.0. Belle sold a 51% stake in its fully owned online network subsidiary, Lucky Star to iVantage Corporation for nearly Php170m.  MARKET SCAN and PRICE ACTION.  The sale of Lucky Star  came as a surprise since the firm falls under the identified “core operations” of Belle, stated as “ the development of high-end leisure properties and computerized gaming activities”.  Lucky Star was formed in 1997 but only commenced operations only during the third quarter of 1999.  Lucky Star was initially established for the prime purpose of a betting franchise concept, which captures the whole range of betting activity from lotto, jai-alai and horse-racing.  We have yet to get Belle or iVantage comments on the sale but market talks quickly took the sale to be relative cheap and valuable for iVantage.  Belle is selling its none core assets to improve its balance sheet which is highly leveraged on net liabilities of Php18.9b, a worrisome DER at 2.6x and a negative retained earnings of Php278m reeling from investment write-offs on FY1999 losses of Php3.34b.  Belle has an upcoming rights offering which is seemingly unattractive for investors given the prevailing unfavorable market conditions.  The sale proceeds of Php170m is likely at cost based on available information of a deferred cost of Php106.5m at end-1999 and Php27.3m in operating expense in 1Q2000.  Belle’s share price trend is bearish coming from a recent high at 1.40 with recent low at 0.94.  Candlestick pattern reflects a long lower shadow, which is bullish for a breakout.  Intermediate trend may continue to be bullish but on a consolidation phase.  Key price support at 0.94 looks firm, which imparts a limited downside risk.  Moving averages are showing a bullish divergence and its narrowing band heightens the likelihood of nearterm price breakout.  Immediate price support is at 0.99/0.94 while price resistance is at 1.04/1.24.  BEL has been dropped among property counters due to its losses with investors awaiting to wait for the completion of the rights issuance and the progress of its planned investment restructuring towards core high-end property and gaming interests. Sentiment can reverse immediately, particularly on strong indications that Henry Sy may be the resulting major shareholder.(Recommended Trading Action: Trading Buy; accumulate towards a pull back towards 0.94; sell objective is at 1.08-1.24 )

PCI Leasing and Finance Inc. (PCIL) – Php1.26. Rumors of the sale of PCIL is brewing anew but we have failed to get firm indications from our resource  network.  What sparked the rumor is the recent increase in trade activity with affiliate brokerage – PCIB Securities as the emerging top buyer.  MARKET SCAN and PRICE ACTION.  Market watchers should not attribute the transaction increase to a potential sale since there had been 4 separate occasions this year, which PCIB Securities emerged as the top buyer in high turnover incidents.  PCIL remains a valued affiliate with an unblemished market record to have a consistent highest credit rating accorded to a leasing and finance company.  PCIL reported a respectable 17% profit growth in 1H2000 of Php96.9m.  PCIL shares are highly illiquid and broker research coverage is nil.  Initial valuation has a hefty discount with its P/Bk at 0.46 while PERFY2000 is 6.3x. Price pattern is on a consolidation phase since February with a likely double bottom at 1.0 in February and May this year.  PCIL’s price has since gradually recovered to a recent high at 1.30.  Despite PCIL’s strong price recovery, its oversold momentum status continues which provides a hint of a bullish intermediate trend.  An Elliot wave scenario also offers a bullish wave3 progress with breakout due at 1.30 and wave top objective at 1.44-1.60.  Immediate price support is seen at 1.10/1.04 while price resistance is at 1.30/1.44. (Recommended Trading Action:  Accumulate on weakness towards 1.10 with target exit at 1.30-1.44; downside risk at 1.04 remains but aggressive positioning is warranted)

September 6, 2000 Wednesday

SPI Technologies, Inc. (SPI) – Php9.0. SPI announced that its start-up e-call center joint venture, eTelecare International, Inc., has secured its first contract with a leading US telecommunications company – Quest Telecommunications. Quest is a leading consumer-based telecommunication company, providing residential dial-tone in most of the 50 U.S states.  For this contract, eTelecare customer service associates will provide continuos coverage for inbound customer service, initially with 75 full-time employees, with significant upside opportunity over the near term.  MARKET SCAN and PRICE ACTION.  SPI’s new contract is a confirmation of eTelecare’s superior value proposition.  Company officials claim that over 30 U.S. client prospects are in the various stages of the marketing cycle.  Two more clients are likely to sign up this month, which may include Amexco.  Expect a rerating on SPI as its accounts book expands further.   Consensus estimates reflect a FY2000PER at 12.3x, FY2001PER at 9.1x, P/Bk at 3.47.  SPI is fairly valued at current levels ahead of the proposed rights offering of 1:7 at Php8.55/share.  As such, we do not expect a significant surge over the near-term but forward (FY20001) price target is Php12.   Near-term price trend is upwards from a recent low at 8.0, a correction from its recent high at 9.50.  Albeit at a notable buy mode, momentum signals are toppish (overbought) and volume analyses warns of a likely near-term top.  Candlestick patterns is a bullish rising window which hints of a minor upmove. An Elliot wave scenario offers  a bullish intrawave5th or a Bwave of bearish wave2.  In both cases, a sell on strength is warranted with immediate resistance at 9.30/9.50 with potential wave extension towards 10.50.  Price support is pegged at 8.70/8.50 while key support is at 8.0.  (Recommended Trading Action:  Sell on strength towards 9.30-9.50; re-entry starts at 8.70 but a key reversal signal offers an aggressive accumulation starts below 8.0)

Equitable Bank Corporation (EBC) – Php68.0. The widely awaited buy-in of a regional banking partner has remained undetermined although market talks continue to reflect confidence that the deal is confirmed.  News reports citing the Fubon Group of Taiwan was neither confirmed nor denied by the Bank although wire news in Taiwan did not carry any news of Fubon’s planned regional expansion.  MARKET SCAN and PRICE ACTION.  Market talks attribute the delay as mere temporary since the available block is deemed an attractive offer given EBC’s market position.  EBC’s market rating is a Hold to a LongTerm Buy.  Consensus profit estimate points to a pricey PER of  27.8x for FY2000, 19.5x FY2001 but offers value with P/Bk value at 1.08x.  Regardless of the buy-in story, EBC’s relative valuation is still fairly decent to warrant an accumulation. Profit growth rate is above-market rating despite a lower ROE and ROA which we find acceptable coming from the merger.  Its relative discount to other banking issues is attributed to a substitute investor holding through the listed warrants which offers trading volatility. Price pattern is trending higher from its recent low at 63 to its recent high at 73.  Momentum signals are toppish with divergence signals, which warns of an upcoming price reversal .  Candlestick patterns reflects a big black candle, which supports a bearish near-term posture.  Volume analyses also hints of a reversal risk since there is no significant price action on higher trade activity.  Immediate price support is seemingly weak at 66.0 while key support levels are at 63/60. Recent signals show a tough price resistance set at 72 and 74.50.  (Recommended Trading Action:  Sell on strength towards 72;  re-entry starts below 66, with more aggressive repositioning below 60;  intermediate trend exit objective is pegged at 79-83).

September 5, 2000 Tuesday

Ayala Land Inc. (ALI) – Php5.20.  ALI officials clarified to select brokers that its winning bid for the 10ha multimodal property at Ft. Bonifacio only requires an initial cash outlay of Php700m.  ALI’s winning investment bid of Php6.9b is not required to be spent over a period of years, but instead, pegged towards the development of the Northrail station.  MARKET SCAN and PRICE ACTION.  ALI’s  new exposure in Ft. Bonifacio was inevitable for its long-term revenue flow.  However, its near-term impact which is not profit nor NAV enhancing was cited as the key disinterest factor among fund managers.  Market rating ranges from a SELL to Neutral/LongTerm Buy.  Consensus valuation supports a neutral outlook:  P/BK at 1.63x, FY2000PER at 20.8x, and P/DCF at 26x.    Price pattern comes from a bearish trend with a marked consolidation pattern for the past 3weeks (5.40-5.10).  Elliot wave reviews point to a bullish medium-term on a likely 3wave rally.  As long as 4.95 stays firm, a breakout at 5.5 points to an intermediate upmove with wave-top target at 6.70 and 7.10.  ALI’s current neutral but rising momentum and MA supports such bullish outlook.  However, risk of a downturn break at 4.95 will have limited fall towards 4.45-4.50.   (Recommended Trading Action:  Buy is prompted below 5.10, with greater aggressiveness on break of 4.95 (on current bias of a limited downtrend risk);  if 5.10 holds and breaks 5.60, a trading buy is also warranted as the upmove objective points to 6.10; intermediate price exit is 6.70-7.10)

September 4, 2000 Monday

International Container Terminal Services, Inc. (ICTSI). – Php1.14.  ICT confirmed it has prequalified with strong chances to bag an operational contract for a  port in Japan, while plans are firm to participate in another port contract bidding somewhere in Asia.  ICT also confirmed it has received offers from foreign groups to acquire all or a part of the company’s international business.  MARKET SCAN and PRICE ACITON.  ICTSI is keenly watched for generating new port contracts and the partial sale of its international holding firm to negate the impact of its foreign exchange losses.  ICT registered a 94% decline in profits to Php15.6m due to non-cash foreign exchange losses due to the put premium accounted for its US$130m convertible notes and its US$154m loan.  Volume handled rose 16% group-wide with local container handling up 8% for the first six months.  With importation likely to recover in 2H2000, ICT’s domestic volume will further increase.   ICT’s market rating ranges from an Underperform to a LongTerm Buy given its unresolved foreign exchange losses.  Relative valuations are decent: P/EBITDA at 2.71, P/Bk at 0.80.  Key concern its likely net losses in 2H2000 given further risk for the peso to fall by another 3-4%. ICT’s price pattern has been recently on a consolidation trend due to breakout from its range of 0.96-1.16.  The potential price breakout at 1.16 will mark a turningpoint for a consolidation breakout and a LT bear downtrend which points to a test of
1.32-1.38.  Near-term rating is a buy from candlesticks prominent white candle while momentum warns of an overbought status which may offer limited growth.  Immediate price support at its price gap at 1.06-1.08 with minor intrawave2 of the 3rd still to be formed. (Recommended Trading Action: sell on strength towards 1.24; aggressive re-entry on pullback below 1.06 with intermediate target sell zone at 1.32-1.52)

September 1, 2000 Friday

Robinson Land Corporation (RLC).  Hotel occupancy rates slightly improved at 60.64% in 2Q2000 from 60.35% in 1Q2000.  Such data dismissed overall wariness of a huge drop in tourist arrival due to the Mindanao crisis and the bombing activities that reached its height in 2Q2000.   MARKET SCAN and PRICE ACTION.  For RLC, hotel revenues declined 8.1% in 1H2000.  The slump in hotel revenues was overshadowed by RLC’s revenue gains in commercial center, office, residential and condo sales which resulted to a gross revenue growth of 31% in 1H2000.  RLC registered an above-market profit growth of 44% at 405m for 1H2000.  RLC is not a widely covered issue given its illiquid shares.  Market Rating is a LongTerm Buy but key brokerage houses recommends a shift towards more liquid property issues.  RLC rating is worth a second look:  P/bk at at 0.51x, Y2000PER at 6.7x.  RLC’s development plans remains firm to ascertain growth:  4 new malls, 4 high rise buildings, one hotel and 4 residential subdivisions.  Fair value should approximate Php3.0.  Price trend is near-term bullish from its record low at 2.0.  Immediate resistance at 2.30/2.36 with price support pegged at 2.10/2.04.  Since momentum is rising with further room to extend gains, anticipate a breakout at 2.30 with immediate objective at 2.50/2.80.  (Recommended Trading Action: buy at current levels with support at 2.04 with target sell zone at 2.50-2.80)