Professional Documents
Culture Documents
M 24
May
24, 2013
Philamongtopstockperformersytd
Philippinesisthe8th bestperformingmarketytd aroundthe
world,up27%inUSDterms.
Leaders ytd
Leadersytd
Rank
Stock
%gain
Sector
TransAsia
+134.5%
Power&energy
AllianceGlobal
+62.3%
Holding Firm
URC
+53.8%
Consumer
Petron
+53.0%
Power &energy
EEI
+52 5%
+52.5%
Construction
MERALCO
+51.2%
Power&energy
Megaworld
+46.9%
Property
GlobeTelecom
+46.4%
Telecommunications
Filinvest Land
+46.3%
Property
10
SMDC
+45.2%
Laggards ytd
Laggardsytd
Rank
Stock
%gain
g
Sector
PepsiCola
5.8%
Consumer
Philex Mining
5.2%
Mining
EDC
5.0%
5 0%
Bloomberry
4.3%
Gaming
Aboitiz Power
+0.4%
Power&energy
Atlas Mining
+2.6%
Mining
First Gen
+7.2%
Power&energy
g
DMCIHoldings
+7.4%
HoldingFirm
g
Aboitiz Equity
+7.6%
10
BPI
+10.9%
Banking
Marketoutlook:Valuation
PerformanceandValuationofSelectedMarkets
((Source:Bloomberg,RSEC)
g
)
ytd
%change
(US$ terms)
2013PE
(x)
MedianPE
(since 2001)
PSEi
+27%
19 6*
19.6*
14 8
14.8
New York(DJIA)
+17%
13.9
17.0
Paris (CAC40)
+9%
12.6
13.5
Frankfurt (DAX30)
+9%
12.4
15.4
London (FTSE100)
+7%
12.5
16.9
Tokyo (Nikkei225)
+27%
22,0
38.4
Hong Kong(HangSeng)
+2%
11.1
14.5
Jakarta (JCI)
+19%
17.0
16.6
Thailand SET
+21%
15.1
12.9
*RSECestimates.OtherindexesbasedonBloombergdata.
Phils2013PEis
aalreadyabove
eady abo e
itshistorical
median.
However, the
However,the
marketisnot
yetatitspeak
of 25x PE set in
of25xPEsetin
2003.
Marketoutlook:Valuation
Markettradesat19.6x2013earnings,alreadyabovethehistorical
median(14.8x).
(
)
However,sincethehistoricalmedianisanaveragemeasure,it
meansthatthemarkethastradedabovethislevelhalfofthetime
in the past and therefore can still trade above this level going
inthepastand,therefore,canstilltradeabovethislevelgoing
forward.Marketstartedtotradeaboveaverageonlysinceearly
2012.
Technically,themarketistrendingupandweadvisetoridethis
T h i ll h
k i
di
d
d i
id hi
trenduntiltechnicalanalysisconfirmsareversalofthetrend.
Uptowhatlevel?
Historically,themarkethastradedatahistoricalhighPEof25x
in2003andcouldmovebacktowardsthishighbeforereversing.
BasedonourtargetpricesforthePSEi
Based on our target prices for the PSEi stocks,weexpectthe
stocks we expect the
PSEi tohit7,800thisyear.
6
Marketoutlook:Valuation
HighPEof35xin2001,
althoughmarketonly
toucheditbriefly
25xPe ismoresignificant
highsincemkt stayedhere
foralmostayear
y
Marketstartedto
tradeabove15x
HistoricalPhilippinemarketPEs
Marketoutlook:Factors
Continuedmarketrunupmaybejustifiedby:
Economicindicatorshavebeenimprovingacrosstheboard
d
h
b
h b d GDP,
unemploymentof6.8%belowhistoricalaverageof9.1%since1994,
budgetdeficit,FXreserves
FitchandS&PhaveupgradedthePhl
h d & h
d d h hl toinvestmentgradethisyear,
d h
Moodysexpectedtofollow;
Financialmarketliquidity;
Furthergrowthinmostcorporateearnings 16%eps growth,from
18%in2012,withhighlikelihoodofanupgrade.
Marketoutlook:Economy
Mosteconomicindicatorsin2012betterthanforecast.2013indicators
expectedtobegenerallybetter.
2011A
2012A
2012F
RealGDPgrowth(%)
3.7
6.6
562
Inflation(%)
4.8
3.1(fullyear)
3 52
BSPovernight
borrowing 1
4.5
3.5
BSPovernightlending1
6.5
AveragePesodollar
A
P
d ll
rate1
2012actualvs target
2013F
Highendofthetarget
672
Lowendoftarget
352
3.5
Ontrack
3.25
5.5
5.5
Ontrack
5.25
43 31
43.31
42 23
42.23
42 96
42.96
St
Strongerthanforecast
th f
t
40 50
40.50
BudgetSurplus
(Deficit),Phpbn 2
(198)
(235.3)
(279.0)
Betterthantarget
(241.0)
Budgetsurplus
(Deficit)/GDP(%)2
(2.0)
(2.2)
(2.6)
Betterthantarget
(2.0)
1RCBCSecuritiesestimate
2Source:Officialgovernmentforecasts.
Marketoutlook:Economy
Mosteconomicindicatorsin2012betterthanforecast.2013indicators
expectedtobegenerallybetter.
2011A
2012A
2012F
2012actualvs target
2013F
OFWremittances,$bn 2
20.1
21.4
21.2
Betterthantarget
22.8
Exports,$bn 1
48.0
52.0
52.7
Belowtarget
57.0
BOPSurplus(Deficit),$bn 2
10.2
8.9
2.8
Betterthantarget
3.0
GrossInternational
Reserves, $bn 1
Reserves,$bn
75.3
84.2
78.1
Betterthantarget
86.0
1RCBCSecuritiesestimate
2Source:Officialgovernmentforecasts.
10
Marketoutlook:Economy
GDPgrowingaboveitshistoricalaverageof5%.
Low 2012 inflation of 3 1% gives the BSP elbow room to cut
Low2012inflationof3.1%givestheBSPelbowroomtocut
interestratesfurthertofightanylingeringglobaleconomic
weakness.
Lowbudgetdeficitgivesgovernmentroomtopursuefiscal
expansionmeasures.
RecordhighGIRof$84bnasofend2012providesammunition
g
$
p
towardoffcurrencyattacks.
11
Marketoutlook:Factors
GDPgrowthhasbeenaccelerating
19962000
20012005
20062010
20112012
3.6%
4.6%
5.0%
5.25%
Average GDPgrowth
AnnualrealGDPgrowth,2001 2012
((%)
)
9
8
7
6
5
4
3
2
1
0
1
2
7.6
67
6.7
5.8
5.2
4.4
31
3.1
2.9
3.6
66
6.6
4.8
66
6.6
5.2
4.2
3.9
1.1
1996 1997 19980.6
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
12
298,532
5.0%
3.8%
3
8%
210,741
235,300
3 7%
3.7%
3.7%
197,754
200,000
2.2%
2.6%
150,000
0.2%
12,441
68,117
64,791
2002
2003
2004
2005
2006
Budget Deficit
2007
2008
4%
3%
2%
146,778
50,000
2001
0.9%
1.0%
0%
199,868
100,000 147,023
5%
3.5%
4.4%
187,057
6%
314,458
2009
2.0%
1%
0%
2010
2011
2012
% to GDP
13
84.20
75.30
80
70
I nbn$
60
62.37
CAGRof16.5%
50
44.24
40
33.75
30
20
18.49
15.69 16.36 17.06 16.23
37 55
37.55
22.97
10
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
14
Marketoutlook:Economy
Phl upgradedtoinvestmentgradefor1st timeinhistory
FitchandS&Praisedthecountryssovereigncreditratingto
investmentgradeearlythisyear.
Upgradescitedcountryslowfiscaldeficitandstrongforeign
pg
y
g
g
exchangereservesposition.
15
Marketoutlook:
Liquiditywillencourageriskseeking
i idi
ill
ik
ki
SDAsamountedtoPhp1.86trillionor$46bnasofFebruary2013.
Thisis20%ofthestockmarketscapitalization.Thegrossrateon
SDAs has been cut to 2%, making stock investing more enticing. BSP
SDAshasbeencutto2%,makingstockinvestingmoreenticing.BSP
saidthiscouldbebroughtdowntoaslowas1%.
BSPisalsorestrictinginvestmentinSDAsbyforeignersandbanks,
excluding UITFs of their trust departments
excludingUITFsoftheirtrustdepartments.
Lowyieldsonfixedincomeinvestmentswouldalsoincreasethe
incentiveforinvestorstoseekhigherreturnhigherriskinvestment
vehicles.
16
Marketoutlook:
Liquiditywillencourageriskseeking
Localparticipationinthestockmarket
Local
participation in the stock market hasimprovedsincethelowin
has improved since the low in
2003
LocalParticipationinthePSE20032012
80.0%
67.6%
70.0%
62.2%
60.0%
50.0%
49.1%
51 3%
51.3%
39.4%
40.0%
51.2%
61.9%
55 1%
55.1%
45.0%
45.3%
30.0%
20 0%
20.0%
10.0%
0.0%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
17
Marketoutlook:
Market
outlook:
Liquiditywillencourageriskseeking
TrustassetshavegrownataCAGR of18%since2002.
Trust Assets (20022012,
TrustAssets(2002
2012,Phpbn)
Phpbn)
Php3,200
Php3,500
Php2,800
Php3,000
Php2,217
p ,
Php2,500
Php1,790
Php2,000
Php1,234
Php893
Php1,500
Php1,000
Ph 813
Php813
Php707
Php597
Php1,177
Php872
Php500
Php0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
18
Marketoutlook:forecasted2013
eps growthat16%
h 16%
Thisyear,weforecastaggregategrowthinearningspershareof
16%,slightlybelowlastyears18%,butchancesofearnings
upgradesarehigh.
d
hi h
1Qcoreaggregateearningsofcompanieswefollowup23%.
19
Risk factors
Riskfactors
Marketsuptrendmaybederailedby:
Strongpeso,whichcouldharmBPOindustry.However,the
centralbankcanmoderatethepesosappreciation.
WeaknessinEurozoneandtheUS.
Weakness in Euro zone and the US
USrecovery,whichcouldbringbackfundsintotheUSstock
market.
Ingeneral,anydisappointmentvs expectationscouldtrigger
selloff.
20
21
Wewillbewatchfulofsignsofamarketreversalandwill
recommend an exit accordingly
recommendanexitaccordingly.
22
Basicsofstockinvesting
Basics
of stock investing
Basics of stock investing
23
24
25
26
27
28
29
1,684.75
7,275.38
The
TheweeklyPSEi
weekly PSEi fell
fell
57%fromOct2007
toOct2008andhas
sincerisen332%as
ofMay20,2013.
30
PhilippineStockExchangeindexcomponents
May21,2013
Stock
Freefloat
marketcap(Pmn)
%Weightinthe
Index
AyalaCorp.
152,642
5.32
Aboitiz EquityVentures
135,573
4.72
AllianceGlobal
107,833
3.76
A l L d
AyalaLand
243 006
243,006
8 47
8.47
Aboitiz Power
53,791
1.87
BDOUnibank
146,202
5.09
Belle Corp
BelleCorp.
29 921
29,921
1 04
1.04
Bloomberry Resorts
39,248
1.37
176,843
6.16
43,348
,
1.51
BankofthePhilippineIslands
DMCIHoldings
g
31
PhilippineStockExchangeindexcomponents
May21,2013
Stock
Freefloat
marketcap(Pmn)
%Weightinthe
Index
EnergyDevelopmentCorp.
59.906
2.09
FirstGenCorp.
25,640
0.89
GlobeTelecommunications
45,821
1.60
I t
InternationalContainerTerminal
ti
lC t i
T
i l
92 344
92,344
3 22
3.22
JollibeeFoods
57,959
2.02
JGSummitHoldings
103,644
3.61
141 220
141,220
4 92
4.92
Megaworld Corp.
39,661
1.38
ManilaElectricCompany
56,470
1.97
MetroPacificInvestments
65,600
2.29
32
PhilippineStockExchangeindexcomponents
May21,2013
Stock
Freefloat
marketcap(Pmn)
%Weightinthe
Index
ManilaWater
53,416
1.86
PetronCorp.
25.118
0.88
Philex Mining
21,943
0.76
RobinsonsLand
38,638
1.35
Semirara Mining
27,531
0.96
SMInvestments
290,555
10.12
S Mi l C
SanMiguelCorp.
40 442
40,442
1 41
1.41
SMPrimeHoldings
105,284
3.67
Phil.LongDistanceTelephone
341,800
11.91
108 475
108,475
3 78
3.78
33
OtherPhilippineStockExchangeIndexes
Allshares
Financials
Industrialindex
HoldingFirms
Services
Property
Mining&Oil
34
PSEtraded
PSE
tradedsecurities
securities
Common
CommonStock
Stock
Entitlestheholdertoownershipinthecompany.Forpractical
purposes,thismeansthattheholderhasvotingrightsinthe
companyandenjoysaproportionateshareintheprofits
throughthereceiptofdividendpaymentsandaresidual
claimwhenthecompanyliquidates.
p y q
Residualclaimreferstotherecipt ofwhateverisleftofthe
companysassetsafterallotherstakeholders(creditors,
preferredshareholders,employees,suppliers,government)
f
d h h ld
l
li
)
havebeenpaiduponthecompanysliquidation.
35
PSEtraded
PSE
tradedsecurities
securities
Preferredstock
Holdersofpreferredstockhavepreferenceoverholdersof
commonstocksintermsofdividendsandclaimupon
liquidation.
liquidation
Holdersofpreferredstocksareentitledtoreceive
dividends,totheextentagreedupon,beforeanydividends
arepaidtotheholdersofcommonstocks.
However,preferredstocksusuallyhaveaspecifiedlimited
rate of return or dividend and liquidation is only based on
rateofreturnordividendandliquidationisonlybasedon
theparvalue.
36
PSEtraded
PSE
tradedsecurities
securities
Warrants
Acorporationcanalsoraiseadditionalcapitalbyissuing
warrants.
Awarrant,normallyissuedonadetachablebasis,allows
itsholderstheright,butnottheobligation,tobuynew
sharesofthecompanyatasetpriceduringaspecified
p y
p
g p
periodoftime.
Itisusuallyprovidedfreeofchargeandtradedseparately
i h
inthesecuritiesmarket.
ii
k
37
PSEtraded
PSE
tradedsecurities
securities
PhilippineDepositaryReceipt
pp
p
y
p
Issuedbyacompanyfacingforeignownershiprestriction,
suchasamediacompany,inordertoallowforeignersto
i
investinthecompany.APDRisanevidenceofownership
t i th
A PDR i
id
f
hi
ofaforeign/foreignbasedentityinaPhilippine
corporation.
Itisasecuritywhichgrantstheholdertherighttothe
deliveryorsaleoftheunderlyingshare,andtootherrights
associated with common stock ownership
associatedwithcommonstockownership.
38
PSEtraded
PSE
tradedsecurities
securities
ExchangeTradedFund
g
Aclosedendfundthatisinvestedinabasketofsecurities
tomimicanindexandtradedinthestockmarket.Inthe
Phili i
Philippines,forexample,itmaytrackthePSEi.
f
l it
t k th PSEi
Sinceitistraded,itspricewillreflectsupplyanddemand
forthesecurityandnottheunderlyingnetassetvalueof
y
y g
thefund.
39
Types of Orders
TypesofOrders
Tradinghoursarefrom9:30amto3:30pmwithabreakfrom
g
p
12:30 1:30pm.
Thesearethetypesofordersthatinvestorsmayplaceinthe
market:
k t
Marketorder
Limitorders
Limit orders
Dayorder
Goodtilcancelledorder
Shortsale
Stoplossorders
40
Types of Orders
TypesofOrders
Marketorder
anordertobuyorsellastockatthebestcurrentprice.For
abuyer,thiswouldbetheprevailingaskprice,whilefora
seller this would be the prevailing bid price
seller,thiswouldbetheprevailingbidprice.
Ensuresthattheorderwillbedone.
Theprevailingaskpriceisthelowestaskingpriceofsellers,
p
g
p
gp
,
whiletheprevailingbidpriceishighestpriceatwhich
buyersarewillingtobuy.
Atransactionoccurswhenthelowestaskmatchesthe
At
ti
h th l
t k t h th
highestbid.
41
TypesofOrders
Atransactionoccurswhenbidandaskpricesmatch.
42
Types of orders
Typesoforders
Howstockpricesarereported:
p
p
Open firsttransactedpriceofstockorfirstcomputedindex
fortheday
High highesttransactedstockpriceorhighestcomputed
indexfortheday
Low
Low lowesttransactedstockpriceorlowestcomputedindex
lowest transacted stock price or lowest computed index
fortheday
Close lasttransactedstockpriceofindexatendoftrading.
43
Types of Orders
TypesofOrders
Limitorder
anorderwhichspecifiesthebuyorsellprice.
Ordermaynotgetdoneifmarketpricedoesnthitthe
buyersbidpriceofthesellersaskprice.
44
Types of Orders
TypesofOrders
Dayorder
y
anorderwhichexpiresifnotdonewithinthedayitis
given.
45
Types of Orders
TypesofOrders
Goodtilcancelledorder
anorderwhichremainsineffectuntilexecutedor
canceled.
46
Types of Orders
TypesofOrders
Shortsale
sellingastockwithouttheshares
youexpecttobeabletobuytheshareslateratalower
price
youexpectthestockspricetogodown
NotyetallowedinthePSE
Not yet allowed in the PSE
47
Types of Orders
TypesofOrders
Stoplossorder
p
investordirectsbrokertosellhisstockifpricedropstoa
specifiedlevel
48
Fill outaCustomerAccountInformationForm.
Fillout
a Customer Account Information Form
SubmitIDpapersforverification
Stockbrokerwillassignatradertoassistinthebuying/selling
activity
3. Givetheordertobrokerandaskforimmediateconfirmationby
phone,emailorwhenordergetsdone.
49
S kM k I
StockMarketInvesting
i
4.Fortraditionalclients,paywithinthreeworkingdays
fromthetransactiondate T+3.
5.Foronlineclients,payontransactiondate.
li
li
i d
6.Receivefrombroker
If
Ifselling,proceedsofstocksaleafter3days
selling proceeds of stock sale after 3 days
Ifbuying,confirmationreceiptandinvoice.Ifphysical
certificateispreferred,mayrequestfrombrokerandpay
therequiredupliftment
q
p
feeofPhp50percertificateand
p p
transferfeeofPhp100+12%VAT.
50
51
Ticksize
Lotsize
0.0001to0.0099
0.0001
1,000,000
,
,
0.01to0.049
0.001
100,000
0.05to0.249
0.001
10,000
0 25 to 0 495
0.25to0.495
0 005
0.005
10 000
10,000
0.500to4.99
0.01
1,000
5.00to9.99
0.01
100
10.00to19.98
0.02
100
20.00to49.95
0.05
100
52
S kM k I
StockMarketInves
ti
ting
BoardLotTable
Marketprice(Php)
Ticksize
Lotsize
50.00to99.95
0.05
10
100.00to199.90
0.10
10
200.00to499.80
0.20
10
500 00 to 999 50
500.00to999.50
0 50
0.50
10
1000.00to1999.00
1.00
2000.00 to4998.00
2.00
5000.00 andup
5.00
53
10.00
x
1,000
10,000.00
Brokerscommission(0.25% +12%VAT)
28.00
PSETransactionFee(Transactionvaluex0.005%)
(
)
0.50
SCCPFee(Transactionvaluex0.01%)
1.00
TotalCashOutlay
10,029.50
54
St k M k t I
StockMarketInvesting
ti
NetproceedstosellastockatapriceofP10.00:
Price pershare
Numberofsharestobe sold
10.00
x
1,000
10,000.00
,
Brokerscommission(0.25% +12%VAT)
28.00
Stocktransactiontax(Transactionvaluex0.5%)
50.00
PSE T
PSETransactionFee(Transactionvaluex0.005%)
ti F (T
ti
l
0 005%)
0 50
0.50
SCCPFee(Transactionvaluex0.01%)
1.00
NetCashReceivable
9,920.50
55
St k M k t I
StockMarketInvesting
ti
Therefore,atminimum0.25%commission,totaltwo
way cost is 1 10%
waycostis1.10%.
56
Additionalcost
fromtwoway
trade
0.25%
1.10%
0.50%
1.65%
0.75%
2.21%
1.00%
2.77%
57
59
Forecasted 2013
2013
Netdividendyield
(%)
PLDT
3,178
4.9%
GlobeTelecom
1,599
4.1%
Ab iti Power
Aboitiz
P
37 10
37.10
3 8%
3.8%
280
3.6%
111
7.7%
Fgen
114.20
6.3%
Pure Foods
PureFoods
1,052
6.6%
SMC2A
79.90
6.3%
Commonshares
Semirara
Preferredshares
Petron
60
61
62
64
Analyzing companies/stocks
Analyzingcompanies/stocks
Fundamentalanalysis
y
determiningvalueofcompany/stock
g
p y/
bylookingatfinancial&operatinghistoryandprospectsand
usingvaluationratios.
Technicalanalysis
T h i l
l i determiningdirectionofpriceofanasset
d t
i i di ti
f i
f
t
bylookingathistoricalpricesplottedonagraphandlooking
forpatternsandbyusingcalculatedindicators.
65
Analyzing companies/stocks
Analyzingcompanies/stocks
Analysisofstocksmaybesourcedfrombrokerswhichhave
y
y
researchteamsofanalysts,eitherfundamentalortechnicalor
both.
Youmaydoyourownanalysisbysourcingcompany
Y
d
l i b
i
informationfromcompanywebsites,thePSEwebsiteand
companiesinvestorrelationsoffice.
Equallyimportant,makeuseofwhatyouknowandwhoyou
know.
66
67
68
AccountTypes
yp
T diti
Traditional
l
O li
Online
Orderposting
Traderviaphone
Via www.rcbcsec.com
Settlement
y
T+3days
Presettlement
Research
MaterialsfromRSEC,inputsfrom
traders
MaterialsfromRSEC
posted onwebsite
Minimuminitial
Minimum
initial
balance
None
Php 10,000
10 000
Commissionrate
0.25%to1.5%
0.25%
69
AccountOpeningRequirements
(Traditional)
y AccomplishedCustomerAccountInformationForm(CAIF)
Accomplished Customer Account Information Form (CAIF)
SeeappendixA
y Filledoutsignaturecards
SeeappendixB
y 2validgovernmentissuedIDs
SeeappendixC
y Personalappearance
IfclientisunabletovisitRSECoffice,mayrequestforcertificationfrom
RCBC branch managers
RCBCbranchmanagers
70
AccountOpeningRequirements
(Online)
y Accomplish
Accomplishonlineapplicationformviawww.rcbcsec.com
online application form via www rcbcsec com
y Printout,signundertakingportionandsubmitoriginally
signedcopiesofform
y 2validgovernmentissuedIDs
y Personalappearance
If
IfclientisunabletovisitRSECoffice,mayrequestforcertification
li
i
bl
i i RSEC ffi
f
ifi i
fromRCBCbranchmanagers
71
Forinquiries,youmaycontact:
SheilaC.Chan
Sales and Trading Department RCBC Securities Inc
SalesandTradingDepartment,RCBCSecuritiesInc.
7/FYuchengco Tower,RCBCPlaza
6718AyalaAvenue,MakatiCity0727,Philippines
(632)8949000loc.1326
scchan@rcbc.com
72
Appendices
73
Appendix A: CAIF
AppendixA:CAIF
Softcopyavailableuponrequest
74
75
AppendixC:ListofAcceptable
IDs
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
y
Passport
DriversLicense
PRCID
NBIClearance
PoliceClearance
PostalID
VoterssID
Voter
ID
Brgy.Certification
GSISECard
SSSCard
DSWDCertification
IntegratedBarofthePhilippinesID
SeniorCitizenCard
OverseasWorkersWelfareAdministrationID
OFWID
SeamansBook
AlienCertificationofRegistration/ImmigrantCertificateofRegistration
GovernmentOfficeID(e.g.AFPID,HDMFID)
CertificationfromtheNationalCouncilfortheWelfareofDisabledPersons(NCWDP)
C
CompanyIssuedIDforPrivateEntities
I
d ID f P i t E titi
StudentID
76