ACCORD CAPITAL EQUITIES CORPORATION

STOCK PICKS: Bargain Hunts

WEEK 36_September 6 to 9, 2010

OVERVIEW: 3,500,000,000.00

3,300,000,000.00
SLOWLY BUT SURELY, investors have began to shed risk-aversion
evidenced by a continued rise in local share prices legitimized by an 3,100,000,000.00

accompanying increase in the average daily value turnover. The chart

end-Q2 average
to the right shows the consistency in the daily averages – from 2,900,000,000.00
PHP 3.205 B
php2.757 billion (end-March) to php3.205B (end 1h) and php3.316B as 2,700,000,000.00
Index up 6.67% q-o-q
of Friday. Over the same timelines, the PSE index added 3.57%, 6.67%
and 10.73%, respectively. These figures are net of block sales values, 2,500,000,000.00 end-Q1 average
YTD average
which, on a year-to-date accounts for a little over one-fifth of the PHP 2.757 B
PHP 3.316 B
Index up 3.57%
almost php700 billion aggregate. 2,300,000,000.00
Index up 10.73% QTD

2,100,000,000.00

Foreign funds have likewise remained positive throughout the year

and despite a huge php10 billion net sell-off during the closing session 1,900,000,000.00

of August, their net position stays at php16.137B, year-to-date.

1,700,000,000.00

Having said that, investors' re-entry into equities have been 1,500,000,000.00

1
5
1
39
7
1
1
2
5
2
9
2
3
7
3
1
4
5
4
9
4
3
5
7
5
1
6
5
6
9
6
3
7
7
1
8
5
8
9
8
3
9
7
9
circumspect, selectively picking up shares of companies backed up by

0
1
5
0
1
9
0
1
3
1
7
1
2
1
5
2
1
9
2
1
3
1
7
3
1
4
1
5
4
1
9
4
1
3
5
1
7
5
1
6
1
5
6
1
9
6
1
fundamentals. We have noticed that only a little over 5%-6% of the
total funds flowing into the market are moving into or out of highly speculative Mining-and-Oil counters. For much of the year, the focus have
been Industrial issues, mostly energy stocks, even as it shifts from time to time to Financials and Holding Firms. Property issues had their share of
the action recently attributed mostly to anticipations of a recovery in the sector spurred by the government's Private-Public Partnership
infrastructure policy thrust as well as the expected introduction of REITs into the menu of stocks. The PSE is reported to be targetting a first REIT
listing by December this year.

While the other sectors' share have added or subtracted a few

MINING & OIL, 4.80%
SERVICE, 13.63%
FINANCIAL, 13.32%
percentage points at the end of August vis-a-vis the end-January
distribution pie, the value flow into Financial counters on one hand
and Mining and Oil issues on the other have gone towards completely
opposite directions. Financial's share rose to 13% from 8%, while the
PROPERTY, 13.87% latter's share was halved from 8.3% to just 4.8% of the 8-month total.
Industrials continue to be the main catch basin, cornering over a third
INDUSTRIAL, 36.68%
of the pie. As of the first three sessions for September, Mining and
Oil's shares is further squeezed to under 4%. (The chart fo the left
HOLDING FIRM,
17.70% shows the percentage distribution per sector over the January to August
period.)

Finally, we note now each sector has continued its strong 2009
performances through the first eight (8) months of the current year.
Services and again, Mining & Oil are laggards, both in fact registering
negative returns over the same period. Yet, in the first three sessions
for September, the former has managed to eke marginal gains of
+0.03%, the latter continues to slide deeper, approaching a year-t0-
date loss of -8.0%. This is in stark contrast to its market leading
235.13% advance in 2009.

Holding firms lead the entire market, returning more than thrice the
Main Index' 22.34%. The sector is led by at least three counters whose
year-to-date prices have more than doubled: JGS (+195.45% to
php19.50; AEV +146.67% to php22.20; and DMC +139.18% to
php23.20). Three other counters have made substantial gains of 2x
the market's: AGI (+69.64% to php7.04), LPZ (formerly BPC, +54% to
php5.34) and SM (+51.69% to php493.00.)

While stock prices have risen substantially, noting that only seven (7) out of the 32-component counters of the Main PSE Index are in the red over
the last 52-weeks, there are still bargains relative to their current PE ratios (vs. Industry averages) and Book Values. We have tabled some of these
issues in the next page, focusing on our two-week old “Stock Farm” of 30-companies.

Beyond those in the list, it may likewise be worth looking into the seven (7) “underperforming counters: MPI, GLO, GMA7, LC, LCB, MER and CHIB.
We will pay particular attention to GLO, GMA7 and MER which, in contrast to the others in this group, continues to be in the red on a year-to-0date
basis. MER is down nearly 10%, LC -3.85% and GMA7 is almost flat with a -0.85% slide.

DISCLAIMER: THE MATERIAL CONTAINED IN THIS PUBLICATION IS FOR INFORMATION PURPOSES ONLY. IT IS NOT TO BE REPRODUCED OR COPIED OR
MADE AVAILABLE TO OTHERS. UNDER NO CIRCUMSTANCES IS IT TO BE CONSIDERED AS AN OFFER TO SELL OR A SOLICITATION TO BUY ANY
SECURITY. WHILE THE INFORMATION HEREIN IS FROM SOURCES WE BELIEVE RELIABLE, WE DO NOT REPRESENT THAT IT IS ACCURATE OR COMPLETE
AND IT SHOULD NOT BE RELIED UPON AS SUCH. IN ADDITION, WE SHALL NOT BE RESPONSIBLE FOR AMENDING, CORRECTING OR UPDATING ANY
INFORMATION OR OPINIONS CONTAINED HEREIN. SOME OF THE VIEWS EXPRESSED IN THIS REPORT ARE NOT NECESSARILY OPINIONS OF ACCORD
CAPITAL EQUITIES CORPORATION ON THE CREDIT-WORTHINESS OR INVESTMENT PROFILE OF THE COMPANY OR THE INDUSTRIES MENTIONED.
ACCORD CAPITAL EQUITIES CORPORATION
STOCK PICKS: Bargain Hunts
WEEK 36_September 6 to 9, 2010

ON the sole basis and application of PE valuations, the table presents

a list of those trading at multiples less than their respective sector
averages. While this is not a straightforward and absolute BUY signal,
it serves to point us in the direction of probable candidates for our
portfolio going into the last four months of the year. Note that two of
the counters mentioned in the prior page as having negative 52-week
returns are found in the list: GLO and CHIB, both currently trading at
10x annulilzed 2010 earnings vis-a-vis their respective sectors' 11.2x
and 14x.

Applying another often used valuation screen, Price-to-Book Value, creates a four-issue list. Notably, we find two counters present in both lists:
AGI and SHNG. Not to the exclusion of the others, we find thus four (4) issues to consider our bargain-hunting list.

ALLIANCE GLOBAL GROUP, Inc.

TICKER SYMBOL @ PSE: AGI
Last Traded Price: Php7.04
EPS growth (CAGR 3 yrs.: 20.26%
current PE (annualized) : 9.28x vs Holding Firms' 9.92x
Fundamental PT: php12.00-15.00
BUY & HOLD

The Company displays a strong balance sheet with Current Ratio at 3.1x and Quick Ratio at 1.67x. 54% of its current assets are in the form of cash
and cash equivalents as well a 47% of the total asset mix. The long-term net cash position is at strong php15B. It has a healthy Debt-to-Equity
ratio of 0.56, otherwise stated, only 37% of the Company's asset are funded by debt. The picture improves further if we consider only interest-
bearing debt and bonds into the calculation, 21.5%. In short, this company is very liquid and fairly leveraged.

The bottomline has consistently grown over the last three years at a compound rate of 20.26%, inclusive of a 21% increase in “global recession
year” 2008. The real estate segment revenues have expanded by a little less than 9% in each of the last two years. The other main business lines,
manufacture and distribution of distilled spirits (under Emperador Distillers, Inc) and its Quick Service Restaurant (QSR) are likewise posting more-
than-decent numbers. Traveller's, Inc. the Group's integrated tourism vehicle, which contributed php595M to the RE segment's revenue for H1
2010, is seen to increasingly become a major revenue source after the completion of current developments. An all-suite Maxims Hotel and budget-
hotel Remington are due to start operations in Q3 2010 and Q2 2011, respectively. A four-star Hamilton, is in the offing.

The stock is trading at a PE of between 9.28x (based on annualized H1

2010 earnings) and 11.26x (using Trailing Twelve Month earnings.)
The holding firms' sector PE is at 9.92x, putting AGI share as fairly
priced. However, ranged against the EPS compound growth of 20%,
AGI may be perceived as a bargain. Thus at the EPS ranges of
php0.62535 and php0.7586, a market valuation of php12 – 15 per share
(pre-crisis, 2006 levels) won't be surprising.

The technicals indicate an approach towards overbought levels (daily)

for the RSI (14) but STO (10,3,3) leaves enough room for further
upside. The short term presents some concern on a temporary
pullback, considering it has gained 10% over the last three trading
days. MACD lends two cautionary signals of such possible price
weakness: First, even as the price's successive low points rose from
php6.12 to php6.30 (see chart), the MACD line fell from 0.2238
(positive spread, above signal line and in positive territory) to 0.184

DISCLAIMER: THE MATERIAL CONTAINED IN THIS PUBLICATION IS FOR INFORMATION PURPOSES ONLY. IT IS NOT TO BE REPRODUCED OR COPIED OR
MADE AVAILABLE TO OTHERS. UNDER NO CIRCUMSTANCES IS IT TO BE CONSIDERED AS AN OFFER TO SELL OR A SOLICITATION TO BUY ANY
SECURITY. WHILE THE INFORMATION HEREIN IS FROM SOURCES WE BELIEVE RELIABLE, WE DO NOT REPRESENT THAT IT IS ACCURATE OR COMPLETE
AND IT SHOULD NOT BE RELIED UPON AS SUCH. IN ADDITION, WE SHALL NOT BE RESPONSIBLE FOR AMENDING, CORRECTING OR UPDATING ANY
INFORMATION OR OPINIONS CONTAINED HEREIN. SOME OF THE VIEWS EXPRESSED IN THIS REPORT ARE NOT NECESSARILY OPINIONS OF ACCORD
CAPITAL EQUITIES CORPORATION ON THE CREDIT-WORTHINESS OR INVESTMENT PROFILE OF THE COMPANY OR THE INDUSTRIES MENTIONED.
ACCORD CAPITAL EQUITIES CORPORATION
STOCK PICKS: Bargain Hunts
WEEK 36_September 6 to 9, 2010

(negative spread, below signal line but still above the zero-line.) [refer to lines “1” in both charts] Second, as the successive tops weakens from
php7.20 to php7.12, the drop in the MACD line is steeper [refer to lines “2” in both charts]. Neverthless, we find a potential upside break of the
signal line, indicating a BUY on price weakness. The weekly and monthly charts however gives a more encouraging BUY and/or HOLD signal over
the longer pull. Near-term pull-back point is at php6.80 while major support is seen at the php6.40-6.45 range. Initial resistance at the php7.70
mark, leaving about a 10% potential upside from current levels.

Note: studies on SHNG, MER and CHIB will be released in the course of the week.

DISCLAIMER: THE MATERIAL CONTAINED IN THIS PUBLICATION IS FOR INFORMATION PURPOSES ONLY. IT IS NOT TO BE REPRODUCED OR COPIED OR
MADE AVAILABLE TO OTHERS. UNDER NO CIRCUMSTANCES IS IT TO BE CONSIDERED AS AN OFFER TO SELL OR A SOLICITATION TO BUY ANY
SECURITY. WHILE THE INFORMATION HEREIN IS FROM SOURCES WE BELIEVE RELIABLE, WE DO NOT REPRESENT THAT IT IS ACCURATE OR COMPLETE
AND IT SHOULD NOT BE RELIED UPON AS SUCH. IN ADDITION, WE SHALL NOT BE RESPONSIBLE FOR AMENDING, CORRECTING OR UPDATING ANY
INFORMATION OR OPINIONS CONTAINED HEREIN. SOME OF THE VIEWS EXPRESSED IN THIS REPORT ARE NOT NECESSARILY OPINIONS OF ACCORD
CAPITAL EQUITIES CORPORATION ON THE CREDIT-WORTHINESS OR INVESTMENT PROFILE OF THE COMPANY OR THE INDUSTRIES MENTIONED.