DA Market Securities 
No Comments Market Update August 16, 2012
PSE breaks critical support at 5,230, -47.15 pts. or 0.90% to 5,219.51
News: GREEN, MWIDE, JFC, MSCI: MER, MBT, URC, AC, SMC
Earnings: AGI, AT, ABC, CHIB, CHIPS, EW
Goldman raises PHL GDP forecasts to 4.9% from 3.8% for 2012, close to low end of gov’t. forecast range 5-6%.
PSEi slips past critical support of 5,230, declining 47.15 pts. or 0.90% to close at 5,219.51, signaling a possible retest of next support at 5,150.
Market was mostly in the red with Decliners overwhelming Advancers 103 to 58 on thin volume with turnover value racking up to only P3.8B, posting a Net Foreign Selling figure P377M. Most sectors were in the red, while Property and Holdings bucked the trend.
JFC 96.75, was a notable decliner on concerns over impact of stores closing due to recent flooding. Supply disruption may also increase food costs.
It was reported that in the MSCI review, weighting was reduced for MER by 0.06, MBT by 0.10; and small cuts for AC and SMC. Meanwhile, weighting on URC was increased by 0.002. MER 251.80 and MBT 92.30 were also notable decliners. Despite hike in weighting, URC was also notably down at 60.70.
Other top index decliners include ICT 68, ALI 22.45, SM 734, MEG 2.23, PX 18.90 (reacting from news on foreseen losses from spillage), BPI 75.40.
On the other hand, top index gainers were FGEN 18.88, AGI 11.18 (reported positive earnings, see below), JGS 33.40, DMC 58.85, RLC 18.96, TEL 2,716, EDC 5.85, SCC 223, CEB 67.90, SMC 112.30.
As earnings season comes to a close, there continues to be a lack of market catalysts. Possible valuation concerns can come to the fore. There is also perceived decrease in trading volume during the “ghost month” period which starts tomorrow Aug. 17 and ends Sept. 15.This period coincides with expected market doldrums in foreign markets as investors go off on summer vacation.
Locally, there are also two consecutive long weekends up ahead with next 2 Mondays (Aug. 20 and Aug. 27) declared as holidays, resulting to 1-day-shortened trading weeks.
Goldman raised GDP growth estimate for Philippines, Malaysia and Indonesia.
PHL 2012 GDP growth from 3.8% to 4.9% and 2013 GDP from 5.0% to 5.3%. This puts 2012 GDP estimate close to lower end of government’s estimate range of 5-6% growth.
Local / Earnings
AGI 11.18, +1.09%
H1 core net income attributable to owners up 22% YoY to P5.73B boosted by higher core earnings from MEG (+15%)
AT 17.04, -0.12%
clarifies consolidated net income is an increase of 58% YoY to P1.61B from re-stated 2011 figure of 1.018B (vs. P2.028B in last year’s report) due to adoption of new financial reporting standards.
Note: The co. explains that the difference between P2.028B reported in H1 2011 and P1.611B in H1 2012 mostly represents mark-to-mark adjustments and non-recurring items.
Allied Bank (ABC) (no trade)
attributable H1 net profit up 22.7% YoY to P728M on higher trading gains (+473%), fees(+10.5%), net interest income(+3%). For Q2, AABC’s attributable net income fell by 41% to P249.9M due to hike in overhead expenses, Net Forex Loss (-P106.2M).
CHIB 476, -0.21%
H1 net profit down by 14.27% YoY to P2.03B attributed to lower asset yields, cost drag of business expansion.
CHIPS 9.68, -0.28%
H1 net profit up 4% YoY to $1.8M; Sales up 5% to $19.3M; Semiconductor demand for H2 seen “much stronger.”
EW 19.50, unchanged
H1 net profit up 3% YoY to P910M on higher net interest income (+18%), non-interest income (+61%) including fees, trading gains. For Q2, EW net profit up 2% yoy to P450M on higher interest earnings and trading gains.
Local / Other News
Fund managed by the ThomasLloyd Global Asset Management (Switzerland) AG of Zurich, Cleantech to buy 20.8B shares of GREEN, valued at P415.5M (which puts per share acquisition price at P0.0199); to enter into another subscription agreement within 45 days amounting to P252M. Disclosure indicates that the transaction is covered by Sec. 1 Rule on Additional Listing of Shares.
MWIDE 16.50, +1.22%
Won 2 school building PPP packages worth P5.2B and P7.6B. The government is expected to pay respective annual lease payments of P523M and P760M for 10 years.
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