Cautious trading lifted share prices slightly higher as investors reduced property shares in favor of industrial and power-related stocks. The benchmark PSEi index rose 6.28 points, or 0.14% higher from Monday, to close at 4,282.62 on moderate trading volume.

Prices could move sideways again today as investors remain cautious of developments and even surprises coming from abroad. Steps to solve Europe’s credit crisis seem to have stalled for the meantime just as US’s economy has continued to show promising signs of growth. Investors are advised to look out for bargains in property and holding stocks ahead of a possible year-end market rally.

Eton Properties Philippines (ETON) warned that its full-year profits may fall short of initial targets due partly to uncertainties from developments abroad. It has scaled down its 2011 profit target to PhP800m, or 20% below its original target of PhP1.0bn. Despite this, the Lucio Tan-led property developer indicated that it will continue its expansion with nine new projects, including two BPO office towers and a residential condominium building within Eton Centris in Quezon City. ETON is expecting flat growth at worst for 2012. Assuming flat net income growth for 2012, ETON trades at a PER of 5.1x, an 80% discount to the property sector’s 25x multiple. Attractively priced but hobbled by poor liquidity. Neutral.



Manila Electric Co. (MER) has agreed to buy all remaining sub-transmission assets (STA) of the National Transmission Corp. (Transco) located within MER’s franchise area. The purchase is in compliance with ERC and the Electric Power Industry Reform Act (EPIRA) which will divest assets to distribution utilities. These STAs are located in the CALABARZON, particularly in Cavite and Batangas provinces with a combined value of PhP523m. Buy on weakness.



Puregold Price Club, Inc. (PGOLD) bagged the Best Mid-Cap Equity Deal category by Finance Asia for its US$172m IPO earlier this year. The prestigious magazine cited the deal’s over-subscription despite the challenging market conditions, and the successful execution of the offering as the main factors for giving the award. The company is in the midst of a massive expansion program, looking to operate a total of 100 retail outlets by early 2012. Buy on weakness.