Philippine Stock Market Trading Advisory

Philippine Stock Market Trading Advisory as of April 23, 2010

After not being able to sustain its position at the 3,300 level, the PSEi is back to the 3,200 level.  The stock market’s PER limit is at 14.6x, while the blended multiplier limit is at 21.9x.  Of the two holding company stocks trading below the two limits, AGI has better upside.  Two thirds of its total revenues mainly comes from McDonald’s and hard liquor sales and rental income.  Being less cyclical, these constitute a firm revenue foundation.  Meanwhile, one third of total revenues comes from sales of real estate from MEG.

AGI’s PER of 18.3x is trading above our PER limit of 14.6x.  However, the full-year effects of revenues from the five-star Marriott and the six-star Maxims Hotels this year will justify the stock’s current price level.  Aside from that, AGI’s PBV of 0.8x is trading at a discount to our PBV limit of 1.5x.  AGI provides exposure to the consumer sector as well as prospects in the property and gaming sectors.

Pymwymi Fund Performance

The Pymwymi Fund is up 16.6%, while the PSEi is up 8.0% from the start of 2010.