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 43_October 26 to 29, 2010
1 of 2

REVIEW October 18 to 22, 2010

HIGHLIGHTS:

PSEI rewrites all-time intra-day and closing peaks, keeps rank. After taking
a breather in the week prior, marked by a half-percent slide, which extended
through the first three sessions of last week, investors returned to the buy
side Thursday and Friday.

The PSEi kept it's leading position among world indexes with a year-to-date
return of 40.42%, behind top performer Djakarta Stock Exchange's 41.96%.
Thailand is in third with 35.08%. SEA markets were generally flat last week,
with only the Philippines managing a rise of over 1.0%. Thailand slipped half-a-percent. Major Asian markets Nikkei and Shanghai are still in the red
year-to-date, the losses widened by a tad after last week. The other China market (HangSeng) is nevertheless up 7.52 percent on the year.

Only the Paris bourse has yet to emerge from it's 2009 close among the three main Eurozone markets. All were up last week.

The American region is led by Buenos Aires' MERVAL's over 22% gains. US markets are registering year-to-date gains under 10%, with the broader
S&P500 slightly trailing the widely-tracked Dow Jones Industrial Average.

Average value turnover drops, slows. This data series showed October average dropping to just below php5.0 billion versus September's php6.128
billion. This has slowed the year-to-date's rise from php3.61 billion at the end of last month to php3.719 billion or a +3.02% pace compared to +9.8%
spike in the August to September period. Aggregate value turnover for the year-to-date has reached php908B with nearly one-third flowing through
trades in the Industrial sector. It's share of the value pie has been narrowing from the 40% average through May. The flow through Financial counters
have steadily risen from under 10% in February to nearly 14% to-date. Over the same period, Holding Firms' share have expanded to almost 19% from
16.5%. Only the Service sector has had a pretty stable piece of the action ranging from 13% to14%. Property and Mining & Oil's turnover value have
added 2.81 and 0.92 percentage points off their May lows, respectively.

0 ADL fails to match index' new high. The ADL denied last week's record close
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 strong techinical support, as it maintained a negative trend. The gains made
-100
by advancers in the last two sessions fell -14 short off erasing decliners' lead.
-200
The indicator continues to generally diverge from the Main index'
-300 movement and direction. (chart, left)
-400

-500
Foreign funds negative flow. Foreigners were net sellers last week
(-php340M) pulling the month-to-date net purchases to only php8.9B, just a
-600
little over half of September total.
-700

Markets continue to trade in technically overbought levels. Except for the Nikkei and Bombay, all markets tabled above are trading at STO levels above
the overbought 80-line based on weekly ranges. The daily perspective however, limits overbought markets to Buenos Aires [MERVAL], Paris (CAC40),
Frankfurt [DAX50] and Shanghai. The rest still have enough room to further the upside momentum over the short term.

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 43_October 26 to 29, 2010
2 of 2

OUTLOOK for WEEK 43_October 26 to 29, 2010

WITH the market continuing to trade at or near overbought levels, not to mention uncharted territory, it would seem prudent to advance a word of caution
with a bias towards profit-taking and waiting for another slip in prices before taking new positions. There is an abundance of technical signals supporting this
tendency towards a heightened aversion to risks. As the table below shows, the STO (10,3) oscillator across all sectors leaves only the Mining & Oil sector
under the overbought line both in terms of weekly and monthly ranges. The daily tab leaves all but the Holding Firms' sector with room for a short-term
upside action.
INDEX/ SECTOR DAILY WEEKLY MONTHLY
PSEI 78.64 97.70 96.73
ALL SHARES 73.34 98.44 97.27
FINANCIAL 70.01 93.92 94.77
INDUSTRIAL 53.00 96.33 95.35
HOLDING FIRMS 89.82 98.64 96.23
PROPERTY 41.76 81.31 90.34
SERVICE 58.16 93.83 80.28
MINING & OIL 40.75 75.28 58.27

The long-term picture drawn by the monthly chart (left) can be similarly
observed using a weekly time-frame. From this perspective, the market
appears to be on the second-leg of a long-term uptrend rising, on average
2.85% per month over the last 19 months. This comes after a 12-month
“correction” of the preceding 55-month bull rush from March 2003 to
October 2007. Over that period, the average return per month was a
bigger 3.48%.

While this graphically illustrates the “trading at uncharted territory”

mentioned at the top, projections as to its forward heading rests on
individual interpretation. This is basically all that the STO tabled above is
telling us – the market is at its top. Yet, two things could happen: either
the move is terminated (temporarily or otherwise) or it could go even
higher. [I feel stupid stating an obvious logical, and open-ended, twin-
bladed suggestion which is no suggestion at all.]

Western market literatures have identified a short-term 48 to 54 month market cycle with the bulls generally taking roughly 36 months (bottom-to-top) and
the bears dominating the balance. That we are in the bull phase is beyond argument – a 63% return last year and a further 40% on the year-to-date puts this
question to rest. The question that we must be able to answer is how much “time” the bulls have left on the market clock? Using the earlier presented
textbook theory, the current cycle is roughly 36 months-old with the bulls dominance running for 19 months. On this basis, we can look forward to about a
year- a year-and-a-half more, interspered of cousre by intermittent reaches to reaction lows that should nevertheless, hold above the 38%-50% retracement
band. From where we are at present, this is found between the 3,000 to 3,300 range.

Having said that however, the current optimism in the market remains thick, even a less than 10% slide invites “bargain hunters,” keeping the index on level.
In fact, prior to Friday's trades, the market moved wihtin a 100-point consolidation band [4,150-4,250] for two-weeks. Ceteris paribus, the prevailing market
sentiment does not support expectations of a nearly 1,000 point slide to the major retracement, possible reversal, range. The major support is still the 4,170-
4,200 band with an interim level at the recenly broken resistance of 4,250.

Cebu Pacific's listing on the first session of a holiday shortened week should provide some excitement and restore liquidity levels near the prior month's
average. Earnings will also begin to creep into trading decisions, with adjustments to projected valuations serving guidance. PE levels will be closely
watched for possible bargains. Among the Main index components, and using TTM EPS, we find seven (7) counters with PE's of 10x or below [FPH 1.11X,
GLO 6.37X, GMA7 8.17X, AEV 9.91X, SECB 10.24X, CHIB 10.28X and MWC 10.34X.] Furthermore, FPH and FLI are still priced below their break-up or
equity book values.

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.