WED 03 JAN 2018

Other News:

UBP: UBP subsidiary set to acquire PR Savings Bank

ALI: ALI expands control over Malaysian developer
PGOLD: PGOLD to open 25 new stores this year (AS OF DEC 29, 2017)
TEL: PLDT sealed US$28.5Mil partnership with Huawei INDICES
Economy: Bank lending grows slower in November Close Points % YTD%
Economy: Factory activity growth slows down but remains solid PSEi 8,558.42 23.33 0.27 0.00

Economy: BSP sees December inflation at 2.9%-3.6% All Shares 4,989.97 26.27 0.53 0.00
Financials 2,230.17 27.42 1.24 0.00
Economy: Domestic liquidity grows 14.0% y/y in November
Holding Firms 8,616.51 10.02 0.12 0.00
Industrial 11,231.30 -46.22 -0.41 0.00
Market Summary Mining & Oil 11,502.58 -7.93 -0.07 0.00
Property 3,978.19 2.33 0.06 0.00
Services 1,619.84 1.91 0.12 0.00
The PSEi advanced on Friday, gaining 23.33 points or 0.27% to 8,558.42.
Dow Jones 24,824.01 104.79 0.42 0.42
Index decliners led gainers 15 to 14, while 1 issue remained unchanged. Most sectors advanced S&P 500 2,695.81 22.20 0.83 0.83
with Financials (+1.24%) leading the gainers and Industrial (-0.41%) declining alone. Significant Nasdaq 7,006.90 103.51 1.50 1.50

index gainers were BDO (+3.67%), GLO (+2.70%), MER (+1.42%), BPI (+1.31%), and AEV (+1.16%).
Meanwhile, significant index decliners were URC (-2.58%), LTG (-2.40%), and SCC (-1.87%). INDEX GAINERS
Ticker Company Price %
Value turnover increased to Php7.3Bil from Php6.4Bil the previous session. Meanwhile, foreigners BDO BDO Unibank Inc 164.00 3.67
GLO Globe Telecom Inc 1900.00 2.70
continued to be net buyers for the fifth consecutive day, accumulating Php1.8Bil worth of shares.
MER Manila Electric Company 328.60 1.42
BPI Bank of the Phil Islands 108.10 1.31
AEV Aboitiz Equity Ventures 74.00 1.16

INDEX LOSERS
Ticker Company Price %
URC Universal Robina Corp 151 -2.58
LTG LT Group Inc 18.74 -2.40
SCC Semirara Mining 36.8 -1.87
JGS JG Summit Hldgs Inc 72.1 -1.57
MBT Metrobank 101.4 -1.46

TOP 5 MOST ACTIVE STOCKS

Ticker Company Turnover
BDO BDO Unibank Inc 741,616,700
SM SM Investments Corp 522,804,200
MEG Megaworld Corporation 429,708,300
SMPH SM Prime Hldgs Inc 426,216,700
MER Manila Electric Company 378,911,900

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.
 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 03 JAN 2018

Other News:

RESEARCH ANALYSTS UBP: UBP subsidiary set to acquire PR Savings Bank

FRANCES ROLFA NICOLAS
ANDY DELA CRUZ City Savings Bank, Inc. (a unit of UBP) is set to acquire 100% of the common shares of Philippine
JUSTIN RICHMOND CHENG
Resources Savings Bank. According to UBP, the acquisition is expected to expand the bank’s
KYLE VELASCO
mass market reach. The transaction, which is subject to closing conditions and regulatory
JOHN MARTIN LUCIANO
approval, is targeted to be completed by 2Q18. Philippine Resources Savings Bank is the 14th
ADRIAN ALEXANDER YU
largest thrift bank in the country with assets of Php12.9Bil. It operates 46 branches and 56
other banking offices. Meanwhile, the bank is currently engaged in extending motorcycle,
agri-machinery, and teachers’ salary loans. (Source: UBP, Businessworld)

ALI: ALI expands control over Malaysian developer

ALI had disclosed that through its wholly-owned subsidiary Regent Wise Investments Limited
(RWIL), it recently signed a share purchase agreement to acquire an additional 17.24% stake
over Malaysian developer, MCT Bhd (MCT). The additional stake translates to 230Mil common
shares, which would be bought from Tan Sri Dato’ Sri Goh Ming for a total cash consideration
of Php2.5Bil. The additional acquisition would bring ALI’s shareholding in MCT to 50.19%
from 32.95%. Following the completion of this transaction, RWIL will be required to conduct
a mandatory take-over offer for MCT in accordance with the laws of Malaysia. According to
ALI, the increased stake will strengthen the company’s commitment in enhancing MCT’s
operations and will also provide ALI with more opportunities to take advantage of the positive
long-term growth prospects of the real estate sector in Malaysia. (source: ALI, BusinessWorld)

PGOLD: PGOLD to open 25 new stores this year

Puregold Price Club Inc. will continue the expansion of its supermarket business in 2018 with
plans to open 25 new stores. This will be the same number of stores PGOLD has targeted to
open last year. By September 2017, the company had 352 stores nationwide comprised of
291 Puregold stores, 13 S&R membership shopping warehouses, 31 S&R New York Style quick
service restaurants, nine NE Bodega Supermarkets, and eight Budgetlane Supermarkets. In
addition to expanding the Puregold brand, the company will also be adding an additional two
more S&R warehouses in 2018. The listed grocery operator has also given a positive outlook for
2018 with the implementation of the first package of the tax reform program taking effect on
January 1. (Source: BusinessWorld)

COL Financial Group, Inc. 2

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 03 JAN 2018

TEL: PLDT sealed US$28.5Mil partnership with Huawei

PLDT has disclosed that it has sealed a US$28.5Mil partnership with Huawei Technologies
Co., Ltd. to overhaul its wireless service delivery platforms and improve its infrastructure and
information technology systems. Under the 15 month agreement, Huawei is expected to
improve Smart’s online charging platforms and electronic loading systems by consolidating
and streamlining similar application for different brands under on system. Huawei is proposing
to use its OCS and eLoad Solutions in order to achieve this. (Source: Businessworld)

Economy: Bank lending grows slower in November

Bank lending in November expanded 19.2% to Php7.0Tril. This is slower than the 19.9%
growth seen in the previous month. Loans for production activities grew slower at 18.5%
with the growth mainly driven by increased lending to the following sectors: real estate
activities (+18.3%); electricity, gas, steam and airconditioning supply (+24.2%); wholesale
and retail trade, repair of motor vehicles and motorcycles (+18.5%); financial and insurance
activities (+23.1%); manufacturing (+11.5%); and, information and communication (+31.4%).
Meanwhile, growth in loans for household consumption decelerated to 20.6% as the faster
growth in credit card loans was offset by the slower increase in motor vehicle loans and salary-
based general purpose loans. (Source: BSP)

Economy: Factory activity growth slows down but remains solid

Although the improvement of operating conditions of factories eased in December, the

activity growth remains solid setting the stage for stronger growth this year. The Nikkei
Philippines Manufacturing Purchasing Managers’ Index (PMI) stood at 54.2 in December,
which is down slightly from November’s 54.8 and last year’s 55.7.A PMI reading above 50 refers
to an improvement in business condition from the previous month, while a reading below 50
suggests deterioration. The Philippine manufacturing economy ended the year on a strong
note, buoyed by growth in both output and new orders. Although output and new orders
both grew at slower rates in December compared to November, the growth still remained
above 2017 averages. (Source: BusinessWorld)

Economy: BSP sees December inflation at 2.9%-3.6%

The Bangko Sentral ng Pilipinas (BSP) said that inflation likely steadied in December compared
to last month despite higher fuel and rice prices. Inflation likely came in at 2.9%-3.6%, matching
the forecast range given for November when inflation actually settled at 3.3%. The expected
December inflation is higher compared to the 2.6% recorded during the same month last year.
Nevertheless, the BSP expects the full-year inflation to be within the 2-4% target band. The
Philippine Statistics Authority (PSA) will release the December and full-year inflation figures
on January 5. (source: Businessworld)

COL Financial Group, Inc. 3

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 03 JAN 2018

Economy: Domestic liquidity grows 14.0% y/y in November

Preliminary data show that domestic liquidity (M3) grew by 14.0% y/y to Php10.4 Tril in
November 2018. This is slightly slower than the 14.8% y/y expansion in the previous month.
Still, on a seasonally-adjusted month-on-month basis, M3 increased by 0.3%. The growth in M3
is due to the growth in domestic claims by 14.7% and net foreign assets in peso terms by 1.9%
y/y in the same period. According to BSP, the growth in M3 remains consistent with its outlook
for inflation and economic activity. (source: BSP)

Summary of Changes in Shareholdings

Acquired or Price per
Stock Volume Person (Designation)
Disposed share
Antonio A. Picazo
MPI 200,000 D 6.81
(Corporate Secretary)
Jose Ma. A Concepcion
RFM 2,000,000 D 4.97
(President and CEO)
Source: PSE

COL Financial Group, Inc. 4

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 03 JAN 2018

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 COL’s 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
[email protected]

CHARLES WILLIAM ANG, CFA GEORGE CHING RICHARD LAÑEDA, CFA

DEPUTY HEAD OF RESEARCH SENIOR RESEARCH MANAGER SENIOR RESEARCH MANAGER
[email protected] [email protected] [email protected]

FRANCES ROLFA NICOLAS ANDY DELA CRUZ JUSTIN RICHMOND CHENG

RESEARCH ANALYST RESEARCH ANALYST RESEARCH ANALYST
[email protected] [email protected] [email protected]

KYLE JEMMRIC VELASCO JOHN MARTIN LUCIANO ADRIAN ALEXANDER YU

RESEARCH ANALYST RESEARCH ANALYST RESEARCH ANALYST
[email protected] [email protected] [email protected]

COL FINANCIAL GROUP, INC.

2402-D EAST TOWER, PHILIPPINE STOCK EXCHANGE CENTRE,
EXCHANGE ROAD, ORTIGAS CENTER, PASIG CITY
PHILIPPINES 1605
TEL NO. +632 636-5411
FAX NO. +632 635-4632
WEBSITE: www.colfinancial.com

COL Financial Group, Inc. 6