TUESDAY, 02 APRIL 2013 Headlines: (As of April 01, 2013) • LC: Commercialization in Far Southeast pushed to 2022 INDICESINDICES • MER: Meralco completes transaction for Singapore LNG plant Close Points % YTD% PSEi 6,839.59Close Points -7.88 -0.12 % 56.44 YTD% PSEiAll Shares 4,236.905,210.89 2.5921.52 0.06 0.41 39.14 19.19 AllFinancials Shares 1,781.153,459.02 0.2014.18 0.01 0.41 83.83 13.60 FinancialsHolding Firms 6,036.901,304.87 77.52 5.26 1.30 0.40 72.31 34.67 HoldingIndustrial Firms 10,238.614,369.45 -35.68 10.57 -0.35 0.24 44.72 24.71 IndustrialMining & Oil 21,106.937,907.14 -397.41 21.75 -1.85 0.28 -10.20 11.77 Property 2,800.61 -31.00 -1.09 89.07 Market Summary Mining & Oil 23,177.28 -59.86 -0.26 -1.39 Services 1,997.80 -16.58 -0.82 23.60 Property 1,908.65 31.58 1.68 28.85 • After reaching a new high and breaching the 6,900 mark, the PSEi reversed and dipped by Services 1,783.59 -1.00 -0.06 10.35 7.88 points or 0.12%. As such, the index closed lower at 6,839.59 as investors took early profits during the afternoon session. • Index decliners led gainers 14 to 13 while 3 issues remained unchanged. The Mining and Oil (-1.85%) and Property (-1.09%) sectors were the weakest yesterday. Significant decliners were INDEXINDEX GAINERS GAINERS ALI (-3.98%), BLOOM (-2.67%), MER (-2.33%), TEL (-2.14%), and URC (-1.77%). On the other TickerTicker Company Price Price % % hand, the Holding Firms sector (+1.30%) was the strongest last trading session. Notable gainers SMPHSMPH SM Prime HldgsHldgs Inc 19.8013.60 3.66 4.29 RLCICT RobinsonsInt'l Container Land Term Corp 95.00 18.46 3.15 2.56 were SMPH (+3.66%), ICT (+3.15%), SM (+3.14%), SCC (+2.62%), and AC (+2.47%). MPISM MetroSM Inv Pacific Corp Inv Corp1150.00 4.20 3.14 1.94 MEGSCC MegaworldSemirara Mining 274.402.15 2.62 1.90 AC Ayala Corp 580.00 2.47 • Value turnover jumped to Php21.7Bil from Php12.9Bil last Wednesday. Foreigners were net ICT Int'l Container Term 71.70 1.85 buyers, acquiring of Php619Mil worth of shares. INDEXINDEX LOSERS LOSERS TickerTicker Company Company Price Price % % URCALI UniversalAyala Land Robina Inc Corp31.40 59.45 -3.98 -3.25 SCCBLOOMSemiraraBloomberry Mining Resorts 220.0013.86 -2.67 -2.65 MER Manila Electric Co 319.00 -2.33 DMC DMCI Hldgs, Inc 57.90 -1.53 TEL Phil Long Distance Co 2,924.00 -2.14 GLOURC GlobeUniversal Telecom, Robina IncCorp 1,135.00 111.00 -1.77 -1.13 JFC Jollibee Foods Corp 105.80 -1.12 TOPTOP 55 MOST MOST ACTIVE ACTIVE STOCKS STOCKS Ticker Company TurnoverTurnover ACTEL PhilAyala Long Corporation Distance Co 824,402,000 378,414,800 Universal Robina Corp 589,711,600 ALIURC Ayala Land Inc 232,134,500 AGI Alliance Global Inc 560,600,800 EVENTS CALENDAR RLC Robinsons Land Corp 207,296,400 SM SM Inv Corp 535,701,300 DATE TICKER COMPANY EVENTS BDO BDO Unibank, Inc 192,199,500 AC Ayala Corp 521,061,300 2-Apr-13 SMB San Miguel Brewery Inc Ex-date Php0.14 Cash Dividend TEL Phil Long Distance Co 183,260,600 2-Apr-13 APO Anglo-Philippine Holding Corporation Ex-date Php0.03 Cash Dividend 2-Apr-13 ALPHA Alphaland Corporation Annual Shareholdings Meeting 2-Apr-13 WEB Philweb Corporation Annual Shareholdings Meeting 3-Apr-13 TA Trans-Asia Oil & Energy Development Ex-date Php0.04 Cash Dividend 5-Apr-13 PNX Phoenix Petroleum Philippines Inc Ex-date Php0.10 Cash Dividend 5-Apr-13 EEI EEI Corporation Ex-date Php0.05 Cash Dividend 8-Apr-13 PCOR Petron Corporation Ex-date Php0.05 Cash Dividend 8-Apr-13 PMPC Panasonic Manufacturing Philippines Corp Ex-date Php0.10 Cash Dividend 10-Apr-13 PRC Philippine Racing Club Ex-date Php0.06 Cash Dividend 10-Apr-13 TSI Touch Solutions Inc Annual Shareholdings Meeting 11-Apr-13 IPO iPeople Inc Ex-date Php0.06 Cash Dividend PHILIPPINE EQUITY RESEARCH Lepanto Consolidated Mining: Commercialization in Far Southeast pushed to 2022 The Far Southeast Project, a joint venture between Lepanto and Gold Fields, is expected to commence operations by 2022, four years later than initial expectation of 2018. While the mine EDMUND LEE project poses as one of the largest mineral resources with over 19.8Mil ounces of gold and 9.9Bil lbs [email protected] of copper, the additional four year delay will negatively impact the stock given the lack of cash flows in both the short and medium term. Manila Electric Company: Meralco completes transaction for Singapore LNG plant Meralco completes transaction for Singapore LNG plant. MER and First Pacific disclosed that Focus Stock they have completed the acquisition of a 70% stake in an 800MW Singapore LNG power plant project. MER will invest US$195Mil in the project and will have an effective 28% stake. The 2x400 Ticker : MER MW LNG Combined Cycle Combustion Turbine Power Plant is located in Jurong Island, Singapore COL Rating : BUY Fair Value : Php380.00 and is expected to commence commercial operations in December, 2013. The off-take of the plant Current Price : Php319.00 will be comprised of a combination of vesting contracts, retail contracts, and merchant supply. The plant will be fuelled by LNG provided by the BG Group under a long-term supply agreement. We reiterated our view that this investment should be positive for MER as it the company an entry into Singapore power generation industry. Earnings contribution to MER from the project will start in 2014, faster than MER’s other power projects such as the 600MW Subic coal which will only be completed in 2016. However, we are still waiting for more details on the Singapore power project such as the power plant’s projected load factor, average selling price and cost structure. Maintaining BUY rating. We are maintaining our BUY rating on MER. We recently increased our FV estimate on MER to Php380/sh from Php327/sh after we reduced our risk free rate assumption from 5.5% to 4%. We like MER since it will be the main beneficiary of the country increasing power GEORGE CHING demand brought about by the rapid growth of the country’s economy. Plans to expand into power [email protected] generation and retail electricity sales should also improve the company’s long term earnings growth prospects. Tuesday, 02 April 2013 page 2 PHILIPPINE EQUITY RESEARCH Investment Rating Definitions BUY HOLD SELL Stocks that have a BUY rating have attractive Stocks that have a HOLD rating have either We dislike both the valuations and fundamentals and valuations, based on 1.) attractive fundamentals but expensive fundamentals of stocks with a SELL rating. our analysis. We expect the share price valuations; 2.) attractive valuations but We expect the share price to underperform in to outperform the market in the next six to near term earnings outlook might be poor the next six to twelve months. twelve months. or vulnerable to numerous risks. Given the said factors, the share price of the stock may perform merely inline or underperform the market in the next six to twelve months. Important Disclaimers 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 it may be incomplete or condensed. All opinions and estimates constitute the judgment of COL’s Equity Research Department as of the date of the report and are subject to change without 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 ans/or its employees not involved in the preparation of this report may have investments in securities or derivatives of securities of securities of the companies mentioned in this report, and may trade them in ways different from those discussed in this report. 2401-B East Tower, Philippine Stock Exchange Centre, Exchange Road, Ortigas Center, Pasig City 1605 Philippines Tel: +632 636-5411 Fax: +632 635-4632 Website: http://www.colfinancial.com Tuesday, 02 April 2013 page 3.