STOCK MARKET WEEKLY STOCK MARKET WEEKLY PRESENTATIONPRESENTATION

30 April 201530 April 2015

PSEi down by 2.92% week-on-week.Review: The PSEi (7,714.82) fell significantly as worries in the US economy translated to a stronger dollar, weaker peso and net foreign selling in the Philippine stock market. It is also suspected that foreigners have been selling in the Philippine market as their confidence for a repeat of good 4Q14 corporate results maybe waning for 1Q15 results. Forecast: Technically, the PSEi favors a rise, as can be seen by the bullish crossover of the stochastic indicators. Also, the 6-sector indices average technical outlook number has improved a little to a bullish 0.833 from a 0.677 in the previous reading. This statistic therefore favors a rise. However, the technical outlook for the peso forex rate has bearish implications for the stock market. As such, these mixed signals warrant a tad more caution.

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Apr.24 Apr.27 Apr.28 Apr.29 Apr.30 May.1 holiday

RECENT NEWS (FOREX RATE)• Average daily forex transactions

– This week: $514.8m (down 9.09% WoW)– Last week: $566.3m

• Foreigners in the stock market– This week: net sellers, 1:1.212– Last week: net buyers, 1:1.003– Average daily number of stocks foreigners

bought (62.2) and sold (52.8) vs. last week’s (60.8) and (51.2).

The Philippine peso forex rate (P44.52 as of Friday) weakened due to a combination of net foreign selling in the Philippine stock market and renewed worries on a US rate hike. The rate has gone above the upper end of the 44.33 target set in the previous week. It will likely build a new band with 44.33 on the lower limit and 44.60 as the upper band limit. A weaker peso could push the rate nearer the 44.79 resistance. However, we expect the BSP to step-in to provide some stability.

The forex rate’s RSI indicator is above neutral. It seems to have momentum.

The DJIA (18,024.06 of Friday) was only moderately lower by end of week as it managed to recover some points lost during the week. The culprit for the dip were poor economic news. The main driver for the rise were the better-than-expected 1Q14 corporate results. Going forward, technically, the stochastic indicators have reversed to a bullish trend. Expect a further gain, much of the rise will likely be due less worries on a interest rate hike. US reported that its GDP almost did not grow in1Q15. Analysts expect US listed stocks’ net income to grow only 0.6% in 1Q15 (M. Craft, AP).

The RSI of the DJIA is above neutral and a trend has not been set.

The PSEi (7,714.82 as of Friday) fell significantly as worries in the US economy translated to a stronger dollar, weaker peso and net foreign selling in the Philippine stock market. It is also suspected that foreigners have been selling in the Philippine market as their confidence for a repeat of good 4Q14 corporate results maybe waning for 1Q15 results. Going forward, technically, the PSEi favors a rise, as can be seen by the bullish crossover of the stochastic indicators. Also, the 6-sector indices average technical outlook number has improved a little to a bullish 0.833 from a 0.677 in the previous reading. This statistic therefore favors a rise. However, the technical outlook for the peso forex rate has bearish implications for the stock market. As such, these mixed signals warrant a tad more caution.

Chart of PSE index and stochastic indicators using weekly data show that the short-term outlook for one month is tending towards a consolidation and eventually a gain by a month’s time. The strategy implication is to buy on dips.

The RSI of the PSEi (using daily data) is neutral and still declining.

6-sector indices average technical outlook. Below is a table that has a technical impression / indicated recommendation for each six sectoral indices of the PSE. The recommendation is based purely on technical analysis and mainly as suggested by the stochastic indicators. The initial choices for the recommendation are: (1) Near Buy, (2) Buy, (3) Neutral, (4) Sell, and (5) Near Sell. For clarification, “Near Buy” means that the stochastic indicators have not yet but approaching a bullish trend, or it also means a recent bullish crossover that is threatened for a bearish reversal. “Near Sell” is the reverse. “Neutral” means that the trend of the indicators is not firm for a buy or a sell. Starting November 8, we assigned points (2 for Buy), (1 for Near Buy), (0 for Neutral), (-1 for Near Sell) and (-2 for Sell). Then we got the average, which indicates also the general view based on sectoral views. For the coming week, the average is 0.833 from 0.667 in the previous reading.

Sector Indices Technical impression and indicated recommendation for the coming week.

Finance Near Buy (1)

Holding Neutral (0)

Industry Buy (2)

Mining/Oil Neutral (0)

Property Buy (2)

Services Neutral (0)