Daily Notes INDEX

DAILY MARKET STATS

VALUE PTS PCT YTD

Thursday, June 25, 2020
PSEI 6,188.83 -108.95 -1.73% -20.81%
Reference: Claire T. Alviar ALL 3,643.43 -42.29 -1.15% -21.64%

Ginebra San Miguel, Inc. [pse:GSMI] FIN 1,257.03 -13.85 -1.09% -32.55%

IND 7,630.06 -133.39 -1.72% -20.81%

ACCUMULATE TP: Php 52.10 HDG 6,452.11 -45.29 -0.70% -15.02%

PRO 3,027.10 -113.39 -3.60% -27.14%

SVC 1,384.16 -14.47 -1.03% -9.60%

STOCK SNIPPETS
M&O 5,273.36 139.05 2.71% -34.83%
Last Traded Price (PHP) 32.50
ASIAN MARKETS
P/E Ratio (x) 6.13 • It remained to be one of the under- (AS O2:30 PM)

valued stocks in the market, with P/ INDEX VALUE PTS PCT YTD
P/B Ratio (x) 1.39
E ratio of below 10x. Nikkei 225 22,534.32 -14.73 -0.07% -4.74%
Support 31.30
• Year-to-date, net foreign buying Hang Seng 24,862.81 -44.53 -0.18% -11.80%
Resistance 36.80 stood at P141.64 million.
Shanghai 2,977.40 6.78 0.23% -2.38%
MTD Performance (%) 7.79 • 2020 would be a challenging year KOSPI 2,166.07 34.83 1.63% -1.44%
YTD Performance (%) -14.47 amid weak demand due to liquor
HCM 866.75 -1.45 -0.17% -9.81%
ban; lower earnings is expected.
SET 1,365 8.57 0.63% -13.60%

STI 2,634.36 -0.56 -0.02% -18.26%

OUR VIEW KLCI 1,503.23 -3.81 -0.25% -5.38%

JCI 4,967.38 88.25 1.81% -21.15%

INTERNALS
VOL 3,797,480,132 ADV 82

VAL 6,607,343,651.79 DEC 121

BLOCK 357,116,765.60 UNCH 33

Hunt for bargains if the market stays above the 20-day exponential moving average (EMA), while
investors await the BSP policy meeting. Investors are looking for more stimulus from the BSP that
could cushion the impact of Covid-19 pandemic, or any hint of optimism amid the crisis. But we
expect that the BSP will maintain the interest rates for now.

Be cautious at the same time, given the four consecutive days of net foreign selling.

TOP 5 GAINERS TOP 5 LOSERS

MPI 1.57% ALI –6.20%

FGEN 1.18% AP –4.64%

JGS 0.83% MER –3.61%

Source: TradingView
SECB 0.74% AC –2.96%

MARKET WRAP AGI 0.71% TEL –2.96%

OTHER MARKET SNAPSHOTS

The PSEi ended in the red, down 108.95 points or 1.73% to 6,188.83, as worries over the Covid-19 Brent Crude 42.80 0.40%
rising cases linger, along with heavy net foreign selling ahead of the BSP policy meeting.
WTI Crude 40.41 0.10%

Philippines recorded another record high of 1,150 cases in a single day. Investors' participation was Gold 1,786.05 0.23%

weak given the lower value turnover which registered at P6.6 billion, compared with this month's Silver 18.07 0.06%
average value turnover of P8.66 billion. The reason behind could be that investors are waiting for Copper 2.65 0.11%
the BSP's policy meeting today. Expectation of unchanged interest rate could also be the reason
US$:Php 49.98 -0.38%
why the Properties (-3.60%) had the biggest lost in the session. Investors priced-in before the lower
interest rates as properties benefit from it, so given that the BSP is expected to maintain the rate, US 10 Yr Yield 0.72% 1.00%

property stocks had a little correction.

Net foreign selling dragged the market further, amounted to P2.06 billion -the highest single day
record this month.

Philstocks Research 2020 1 |Page

LOCAL NEWS Philstocks Research
JUSTINO B. CALAYCAY, JR
Budget Deficit recorded in May. May revenues fell to P151.5 billion from the P317.2 billion in the AVP-Head, Research & Engagement
same time last year, while expenses jumped to P353.6 billion. This brings to budget deficit of P202.1 +63 (2) 8588-1962
billion. Bureau of Internal Revenue contributed the bulk of revenues recorded at P114.4 billion,
44.13% lower y/y. JAPHET LOUIS O. TANTIANGCO
Sr. Research Analyst
The wide budget deficit is seen to be sustained for the rest of the year as the government +63 (2) 8588-1927
aggressively spends to support the economy amid falling state revenues. The public spending will
help the economy weather the storm brought by the COVID-19 and its consequent quarantine PIPER CHAUCER E. TAN
measures. This will come at an expense however in the form of higher government debt levels which Engagement Officer/Research Associate
are needed to be serviced in the future, possibly through higher taxes. At the same time, the +63 (2) 8588-1928
government's aggressive borrowing in these times is expected to give upward pressure to interest
CLAIRE T. ALVIAR
rates. This will be tempered however, if the BSP keeps monetary policies accommodative. –Japhet
Research Associate
Louis Tantiangco
+63 (2) 8588-1925

Ground Floor, East Tower

GLOBAL NEWS PSE Center, Tektite Towers
Ortigas Center, Pasig City
Possible sell-off may hit US stocks amid equity rebalancing. There’s a speculation in Wall PHILIPPINES
Street that some asset allocators like pensions and other funds will sell gains from the stock market
and buy bonds in the coming week, The amount of pension fund rebalancing is estimated from $35 DISCLAIMER
billion to $76 billion, which is seen to be the largest in six years.
The opinion, views and recommendations
There could also be a risk of small correction in the local bourse as the possible sell-off in the US contained in this material were prepared by
markets may spillover in the market. It follows with a question of why these firms will transfer funds the Philstocks Research Team, individually
into the bond market. It can be (1) stocks are at fair value or overvalued already, (2) safe assets and separately, based on their specific
could be more attractive than equities given the current situation, or (3) strategists were avoiding sector assignments, contextual framework,
high volatility in the market amid uncertainties. personal judgments, biases and prejudices,
time horizons, methods and other factors.
The reader is enjoined to take this into
COMPANY NEWS account when perusing and considering the
contents of the report as a basis for their
stock investment or trading decisions.
ACCUMULATE Ginebra San Miguel, Inc. [pse:GSMI] Furthermore, projection made and presented
in this report may change or be updated in
GSMI posted strong earnings in 2019 with net income surging 59% , while revenues grew 17%. Sales between the periods of release. Ergo, the
volume also increased by 14% amid the roll-out of its marketing campaigns. However, the company validity of the projections and/or estimates
admitted that 2020 would be a challenging year, along with the other businesses. This results in lower mentioned are good as of the date indicated
earnings for the first quarter, compared with the same period last year.
and may be changed without immediate
Accumulate some shares of GSMI if you’re looking for undervalued stock. GSMI is trading around 6x notification.
P/E ratio, lower than its 5-year average of 10x and PSEi’s current P/E ratio of around 14x. But this
This report is primarily intended for
year would be a very challenging year amid the liquor ban following the guidelines of community
information purposes only and should not be
quarantine. We expect lower earnings from the company this year, then will rebound in 2021. In
considered as an exclusive basis for making
addition, GSMI is one of the foreigners’ favorite with year-to-date’s net foreign buying of P141 million
despite its poor performance in the first quarter. investment decision. The recommendations
contained in this report is not tailored-fit any
Chart-wise, the stock has been on a downtrend since August last year, and we think that in order to particular investor type, situation, or
shift the trend, it must break the trend resistance (red broken line) or breach the 200-day EMA. In the objective and must not be taken as such.
short-run, it tried to break the resistance but it failed due to weak volume—there was a divergence Determining the suitability of an investment
between rising share prices and declining on-balance-volume indicator. remains within the province of the investor.
Our estimates are based on information we
Target Price: P52.10 believe to be reliable. Nevertheless, nothing
in this report shall be construed as an offer
of a guarantee of a return of any kind and at
any time.

Rating Definitions:
BUY - More than 15% upside base on the target price
in the next 9-12 months

HOLD - 15% or less upside or downside in the next

9-12 months

SELL - More than 15% downside base on the target

price in the next 9-12 months
TRADE - A potential 10% and above short-term upside
base on entry price and selling price.

Source: TradingView

Philstocks Research 2020 2 |Page