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F RI 02 D EC 2016

INDICES

Notable Movers:

PCOR
CEB

(+10.438%)
(-5.42%)

Shares rose on rising crude oil prices due to the production cut by
OPEC.
Shares declined on rising crude oil prices due to the production cut by
OPEC.

Top Stories for the Week:

COLing the Shots: Time to be greedy, not fearful


The PSEi is now down 16.3% from its July peak of 8,102.30. In fact, it has erased all its gains
for the year 2016. The three main factors responsible for the sell-off are President Dutertes plan
to separate military and economic ties with the U.S.; the surprise victory of protectionist Donald
Trump in the U.S. presidential election; and the growing likelihood of a U.S. Fed rate hike.
The markets negative reaction to potentially we aker ties with the U.S. is not surprising given
the large share of the U.S. in terms of the Philippines total exports, foreign direct investments,
tourist arrivals, OFW remittances, and BPO employers. Meanwhile, Trumps plan to cut taxes
and boost spending on infrastructure is expected to spur U.S. economic growth and drive inflation
higher resulting to higher interest rates and a stronger U.S. dollar. Coupled with concerns of how
Trumps protectionist policies would hurt EM economic growth, funds are now flowing out of EM,
including the Philippines, back to the U.S.
However, a more thorough analysis of the numbers makes us less worried about the
consequences of the Philippines potentially doing less business with the U.S. and the impact of
a weaker peso and higher interest rates on the economy and the stock market.

RLC: 4QFY16 income declines 21.1%


4QFY16 income decline 21.1%, FY16 income lag estimates. RLCs net income for 4QFY16
declined 21.1% y/y to Php1.62 Bil despite a 19.5% growth in revenues. The profit decline
was due to higher interest expense. For the fiscal year 2016, RLCs net income amounted to
Php5.93 Bil, just 4% higher than a year earlier and lags both COL and consensus estimates.
Underperformance was due to higher than expected depreciation and interest expense.
Lowering FV estimate to Php31.50 but upgrade to BUY. We are lowering our FV estimate on
RLC from Php33.50 to Php31.50 as we increase our discount to NAV from 15% to 20% to factor
in higher risk in the residential and office segments. With RLC taking a cautious stance of not
launching residential projects, there is risk that residential revenues will be negatively affected in
the short to medium term. On the office leasing side of the business, we mentioned in our sector
report dated Oct. 27, 2016 that there is a risk of an oversupply in 2018-2019 given the large
amount of supply coming into the market. This puts take-up and occupancy of future spaces
at risk. Nevertheless, we are upgrading our recommendation to BUY as the share price has
declined significantly in the past two months and we believe much of the risk has been priced in.
In addition, upside to our fair value estimate is substantial at 18.2%.

Close

Points

PSEi

6,886.74

-3.04

-0.04

W/W YTD %
-0.94

All Shares

4,166.49

-10.05

-0.24

4.41

Financials

1,690.76

18.68

1.10

9.03

Holding Firms

7,015.83

-9.93

-0.14

6.28

Industrial

11,016.33

8.21

0.07

-0.13

Mining & Oil

12,094.56

-135.98

-1.12

15.99

Property

3,050.47

-22.51

-0.74

4.63

Services

1,280.14

-15.98

-1.25 -16.34

INDEX GAINERS
Ticker Company

Price

PCOR

Petron Corporation

10.12 10.48

W/W

DMC

DMCI Hldgs Inc

13.40

5.18

SMC

San Miguel Corporation

85.40

2.89

BDO

BDO Unibank Inc

115.20

2.86

FGEN

First Gen Corporation

22.20

2.30

INDEX LOSERS
Ticker

Company

LTG

LT Group Inc

MEG

Megaworld Corporation

RLC

Robinsons Land Corp

GLO
TEL

Price

W/W

12.94

-5.13

3.70

-4.64

26.00

-4.41

Globe Telecom Inc

1,390.00

-4.14

PLDT Inc

1,270.00

-4.08

TOP 5 MOST ACTIVE STOCKS


Ticker

Company

TEL

PLDT Inc

724,980,125

Turnover

ALI

Ayala Land Inc

620,261,975

SM

SM Investments Corp

490,566,725

URC

Universal Robina Corp

457,866,225

MBT

Metrobank

394,125,500

Disclaimer: All content provided in COL Reports are meant to be read in the COL Financial website. Accuracy and completeness of content cannot be guaranteed if reports are viewed outside of
the COL Financial website as these may be subject to tampering or unauthorized alterations.

W eekl y N o t es I P h i l i p i ne Equi ty Resear ch


F R I 02 D EC 2016

Other Stories:
Banking Sector: Banks generally performed well, led by the smaller banks
Consumer Sector: Most companies lagged estimates on higher costs and tougher competition
URC: FY16 results underperform on weak domestic branded operations
MER: MER subsidiary applies for RES license with ERC
Market Summary:
The PSEi ended flat, coming from a weak start, as the index recovered on the back of a surprising
production cut by the OPEC leading to a surge in crude oil prices. The main index lost 3.04 points
or -0.04% to close at 6,886.74. With only four trading days this week, value turnover increased to
Php34.5Bil from Php30.3Bil the previous week. Foreigners continued to be net sellers throughout
the week, liquidating Php1.7Bil worth of shares.
Summary of Changes in Shareholdings:
Date of
Disclosure

Stock

Volume
2,000
3,000
5,000
2,000
2,000
2,000
1,000
5,000
1,000
2,000
21,000
1,500
1,000
1,000
1,000
5,310
9,190

Acquired or
Disposed

268.00
268.60
269.00
269.20
270.00
270.80
272.60
272.80
273.00
273.20
268.00
268.20
270.60
271.00
271.20
271.80
272.00

28-Nov

MER

28-Nov

MER

29-Nov

EW

19,400

18.95

29-Nov

TEL

5
995

1323.00
1324.00

1-Dec

MER

15,000

266.00

1-Dec

PCOR

1-Dec

MER

2-Dec

BDO

10,000
10,000
5,000
5,000
10,000
10,000
12,000
25,600
2,400
4,400

Price per
share

D
D

9.04
9.12
9.15
9.22
9.23
9.25
19.04
19.05
19.06
112.00

Person (Designation)

James L. Go
(Director)

James L. Go
(Director)

Antonio C. Moncupa, Jr.


(President and CEO/Director)
Manuel V. Pangilinan
(Chairman, President and Chief Executive Officer)
James L. Go
(Director)

Susan Y. Yu
(Vice President - Procurement)

Josephine Gotianun-Yap
(Director)
Noel L. Andrada
(Senior Vice President)

source: PSE

Disclaimer: All content provided in COL Reports are meant to be read in the COL Financial website. Accuracy and completeness of content cannot be guaranteed if reports are viewed outside
of the COL Financial website as these may be subject to tampering or unauthorized alterations.

C ale nd a r o f Ev e nts

NOVEMBER

F R I 02 D EC 2016

W eekl y N o t es I P h i l i p i ne Equi ty Resear ch

TH

29

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

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27

28

29

3301 2315 26

27

28

29

30

Key E vents

Hol i day

NOV 3
LOTO : E x-d a te Php 0.38 C a s h D iv id e n d

N OV 10
AT N : An n u al S h ar eh ol der s M eet i n g

N OV 2 3
M ED: A n n u al S h ar eh ol der s M eet i ng

NOV 4
P SB: Ex- d a te Php 0.75 C a s h D iv id e n d

N OV 11
C IP : E x -d a t e Ph p1 7. 2 36 C ash Di v i den d

N OV 2 8
A R A : A n n u al S h ar eh ol ders M eet i ng

NOV 7
L B C: E x- d a te Php0.2 2 C a s h D iv id e n d
SE CB : E x-d a te Php1.00 C a s h D iv id e n d

N OV 15
W IN : An n u al S h ar eh ol der s M eet i n g

N OV 2 9
PO PI : A n n u al S h ar eh ol der s M eet i ng

NOV 8
UP M: An nua l Sha reholde rs Me e tin g
NOW: Annua l Sha reho ld e r s Me e tin g
FP I : Ann u a l Sha rehold ers Me e tin g

N OV 21
P H C : An nu al S h ar eh ol der s M eet i n g
N OV 22
MAH : An nu al S h ar eh ol der s M eet i n g

Disclaimer: All content provided in COL Reports are meant to be read in the COL Financial website. Accuracy and completeness of content cannot be guaranteed if reports are viewed outside
of the COL Financial website as these may be subject to tampering or unauthorized alterations.

W eekl y N o t es I P h i l i p i ne Equi ty Resear ch


F R I 02 D EC 2016

Important Rating Definitions


BUY
Stocks that have a BUY rating have attractive fundamentals and valuations based on our analysis. We expect the share price to outperform the market in the
next six to 12 months.
HOLD
Stocks that have a HOLD rating have either 1) attractive fundamentals but expensive valuations 2) attractive valuations but near-term earnings outlook might
be poor or vulnerable to numerous risks. Given the said factors, the share price of the stock may perform merely in line or underperform in the market in the
next six to twelve months.
SELL
We dislike both the valuations and fundamentals of stocks with a SELL rating. We expect the share price to underperform in the next six to12 months.

Important Disclaimer
Securities recommended, offered or sold by COL Financial Group, Inc. are subject to investment risks, including the possible loss of the principal amount
invested. Although information has been obtained from and is based upon sources we believe to be reliable, we do not guarantee its accuracy and said
information may be incomplete or condensed. All opinions and estimates constitute the judgment of COLs Equity Research Department as of the date of the
report and are subject to change without prior notice. This report is for informational purposes only and is not intended as an offer or solicitation for the purchase
or sale of a security. COL Financial and/or its employees not involved in the preparation of this report may have investments in securities of derivatives of the
companies mentioned in this report and may trade them in ways different from those discussed in this report.

COL Research Team


April Lynn Tan, CFA
VP & Head of Research
april.tan@colfinancial.com
Charles William Ang, CFA
George Ching
Richard Laeda, CFA
Deputy Head of Research
Senior Research Manager
Senior Research Manager
charles.ang@colfinancial.com george.ching@colfinancial.com richard.laneda@colfinancial.com
Frances Rolfa Nicolas
Andy Dela Cruz
Justin Richmond Cheng
Research Analyst Research Analyst Research Analyst
rolfa.nicolas@colfinancial.com andy.delacruz@colfinancial.com justin.cheng@colfinancial.com
Kyle Velasco
Research Analyst
kyle.velasco@colfinancial.com

Contact
COL Financial Group, Inc.
2402-D East Tower, Philippine Stock Exchange Centre,
Exchange Road, Ortigas Center, Pasig City
1605 Philippines
Tel No. +632 636-5411
Fax No. +632 635-4632
Website: www.colfinancial.com

Disclaimer: All content provided in COL Reports are meant to be read in the COL Financial website. Accuracy and completeness of content cannot be guaranteed if reports are viewed outside
of the COL Financial website as these may be subject to tampering or unauthorized alterations.