ACCORD CAPITAL EQUITIES CORPORATION

GF EC-058B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City, PHILIPPINES 1605 (632)687-5071 (trunk)
Outlook for Week 5_January 31 to February 4, 2011_TD 021 to 025
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Quick Review and Analysis:

THE Philippine market registered its first decent weekly gains following a two-week, 6.0% drop. It ended the first week of trades flat. The PSEI rallied 58.85
points Thursday before giving up less than half the day after to close out the week at 3,970.34, 19.3 points or 0.5% higher than the preceding period. It was
actually marked by alternating ups and downs, drawing an uptrending line. Nevertheless, the month is poised to end in the red, as it rests on a -5.5% loss with
only a day's worth of trades left.

Value turnover narrowed to php23.25 billion (net of block sales) week-on-

40.00
week even as volume turnover increased over 16% to 11.927 billion. This
may be an indication of investors generally veering away from higher-priced, 35.00

M
blue chip counters which continued to fall victims to heightened foreign

ilons
30.00
selling. Year-on-year however, both volume and value registers substantial
25.00
improvements, highlighting a more intense appetite for equities. As of last
Friday, a total of 52.539 billion shares have changed hands valued at 20.00
php106.622 billion. Netting out block sales, the numbers drop marginally to 15.00
51.082 billion and php97.596 billion, respectively. 10.00

The bar charts show value flow have increased across all sectors, year-on-year. 5.00
Aggregate flows into the Financial, Industrial, Property and Mining & Oil -
sectors more than doubled. Holding Firms and Services saw turnover FINANCIAL INDUSTRIAL HOLDING FIRM PROPERTY SERVICE MINING & OIL
increasing by more than 73% and 42%, respectively. Total market value
turnover increased 87%. -- Again, note that these figures still leave Monday's 2010 2011
trades on the balance.

Percentage shares increased for Financials, Industrials, Property and Mining &
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00%
Oil and slipped for Holding Firms and Service issues. The bulk continues to
FINANCIAL focus on Industrial stocks (33%), with Holding Firms and Property sectors
cornering roughly 17% each. Mining and Oil edged Finanicals, leaving the
INDUSTRIAL
latter with the least share at 9.2%.
2010
HOLDING FIRM
2011 Compared to end-2010 levels, the percentage shares of Industrials, Property
PROPERTY
and Mining & Oil expanded, as investors shifted focus against Financials,
SERVICE
Holding Firms and Service sectors.

MINING & OIL Not surprisingly, Industrials, Property and Mining & Oil suffered losses less
than the same period last year.

4.00 Foreign selling has dissipated in the last four sessions, (evidenced by the rising
3.00
green line in the chart) overturning the over half-a-billion net sold Monday.
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Their year-to-date position remains negative however, at php3.029 billion.

s

2.00
This is a complete reversal from their positive php2.194 billion position at the
1.00 end of January last year. Foreigner have thus sold as much as php6.648
- billion or -11.6% of their peak net positive holdings of php57.369 billion as at
November 4 last year.
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(2.00)
Based on the net accumulated transactions through the first three weeks,
(3.00)
foreigners have sold more than half-a-billion worth of Aboitiz Power
(4.00) Corporation [pse: AP, php29.30, -5.8% ytd], SM Investments Corporation
(5.00) [pse: SM, php489.00, -9.9% ytd], Metropolitan Bank and Trust Co., [pse:
(6.00) MBT, php66.60, -7.5% ytd] and Cebu Air, Inc [pse: CEB, php99.20, -12.5%
ytd.]

On the other hand, net purchases of over php100M for the same period have flowed into Security Bank Coporation [pse: SECB, php88.00, +2.6% ytd], Manila
Water Corporation [pse: MWC, php18.18, -5.2%, ytd], Fil-Estate Land, Inc. [pse: LND, php2.23, +52.7% ytd], Petron Corporation [pse: PCOR, php14.80, -21.4%
ytd], Lopez Holdings Corporation [pse: LPZ, php4.85, -8.7% ytd] and San Miguel Corporation [pse: SMC, php178.00, +8.7% ytd.]

The tail-end of the January-to-date's Advance-Decline Line suggest we may have

-D

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seen an interim bottom when the index hit the 3,880-3,900 support range. It
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-100
supported last week's higher highs and lows registered by the index, albeit the
corressponding tops only made a mininal (1-point) improvement over the prior -200

peak. Nevertheless, the wider margins posted by the rising troughs lends -300

confidence on the earlier posited major support range. This is better than that -400

observed for January 2010 which showed only half of the higher-top and bottom -500

pattern described earlier. Furthermore, the fall in the indicator was steeper then. -600
Recall that last year saw the index fall through mid-February to as much as -8.4% -700
to the 2,797.61 low which turned out to be the base of last year's 37.6% rise. -800

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
GF EC-058B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City, PHILIPPINES 1605 (632)687-5071 (trunk)
Outlook for Week 5_January 31 to February 4, 2011_TD 021 to 025
2 of 2

THE PSE index remains in a month-long downtrend marked by lower tops

and bottoms. Last week's close keeps it below the immediately prior trough
of 4,032.37. This currently represents the initial upside target range for the
index which will restore it inside the erstwhile 2.5 month, 180 to 200-point-
trading band. We have mentioned at the top that the last week saw alternate
swings with a positive bias, illustrated in the chart as line 5.

The long-term view show the market in a consoloation phase wihtin a wide-
band and imparted with a slight negative bias. This following a nearly 6-
month uptrend proceeding from its break outside another 3-month band in
Q2 last year. The main trading range is found between 4,040 to 4,220.
Over the near-term, however, the market may move within a healthy basing-
action between 3,950 and 4,030.

Our triple indicators composed of the STO (10,6,6), MACD (12,26,9) and
AccDist Line, all posit a better week bridging the close of January trades and
opening those for February.

STO (10,6,6) a widely-followed indicator for trade entry and exit points,
provides two simultaneous BUY signals. First, it emerges from oversold
territory rising in the last two sessions from its lowest reading of 11.82 to
21.05, just marginally above the 20-oversold line. A pullback inside the the
oversold area and a subsequent rise past the same line will further lend
credence to the BUY proposition. At the same time it does this, the STO line
has likewise broken above the trigger line – a near-term BUY signal. The
weekly chart for the indicator continues to suggest a sideways bias while the
month-on-month locates the market at still overbought levels. This suggests a
short-term trading oppoturnity.

The MACD on the other hand shows the build-up of upside momentum
simultaneous to the disspation of negative pressures as evidenced by the
narrowing spreads. The MACD line is nearly sideways with a positive bias
propositing a possible upsdie penetration of the signal line moving forward.
At the very least, it posits an ensuing rally may be gradual and may be
immediately capped by profit taking.

Finally the AccDist Line draws a shift to accumulation last week after the aggressive sell-off that has marked the greater part of the year-to-date trades.

OUTLOOK for Week 5_2011

January is poised to end with losses bigger than that sustained over the same month last year. In fact, it would take a 92.16 advance Monday just to match the -3.3%
retreat in January 2010. Then again, this was within our expectations at the beginning of the year. To our mind, the market remains wanting in fresh leads to push
the index further and break the 4,400 line. Admittedly, we were surprised by the magnitude of the decline over a short period of time. Nonetheless, with the market
moving within our expectations, we find no justifications to alter the outlook we presented at the start. We remain bullish over equities.

Q4 inflation slowed to 2.9%, compared to Q3's 3.8%, easing concerns that inflation may threaten the growth pace as much as it has challenged monetary officials
of other emerging economies. The full-year number, 3.8%, fell inside the 2.5% - 4.5% target range.

The Dow slipped -166 points Friday, failing to sustain the 12,000-level after political tensions rose in Egypt spurred oil prices higher. The markets practically ignored
date showing the US economy grew at a 3.2% annual pace in Q4, a significant jump from the previous quarter's 2.6%. Consumer spending accelerated by the most
in more than four years. This may lend some weakness at the opening of trades and send the index to test the 3,880-90 support range.

Nevertheless, the release of the country's Q4 GDP may provide the necessary positive spin to keep bargain hunters in the field. The government's main economic
planning agency, NEDA, has expressed confidence on a 7.0% pace, higher than the 5.0% to 6.0% official target. 2011 growth is forecasted at between 7.0% and
8.0%. Economic managers met last week but stayed any adjustments in the targets saying “it is still too early in the year to start revising those targets.”

We see the market building and strengthening support at the 3,880-90 range even as it attempts to break through the 4,000-4,040 resistance and restore the market
to the previous trading band.

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.