And the Tapering Starts...
US Federal Reserve has officially started its tapering campaign. From the FOMC meeting it has been decided that the bond purchases would be reduced by $10 billion, from $85bn to $75bn.
The amount is considered small and somehow satisfies the market.
Upbeat view from the Fed on the job market has also set off positive mood.
In addition, budget proposal approved by the US Senate and sent to President Obama is potentially reducing the US deficit for the next 10 years through $63bn of automatic spending cuts.
SIDO Debuted
SIDO debuted on Wednesday, off on a fine start. The stock gained 20.69% on the first day, and settled at 700 per share.
Elsewhere, PT Capitol Nusantara Indonesia (CANI) set out its IPO price range at 190-230 as it seeks to finance a purchase of an AHTS fleet to support the company’s operations.
Technically Speaking...
JCI is expected to rebound on Thursday as positive mood sets in.
The nearest resistance is spotted at 4,282, followed by 4,331. On the flip side, the support is seen at 4,109 with interim support at 4,172.
MACD is struggling to regain footing above the zero line, while the RSI is also heading towards the neutral zone. So far, the bullish divergence structure remains intact and this is in line with the fundamental outlook.
Moreover, despite the tiny progress since the low at 4,109 was established, the volume has picked up nicely, supporting the near-term bullish outlook.
PTPP has been added to the reco list, replacing ALTO which got stopped out earlier.
Day Ahead
Strong finish on Fed decision is expected to set off a positive mood in Indonesian stocks as well. We expect a rebound, but we should keep in mind that JCI is increasingly dependent on the BI’s policy rather than the Fed. BI itself has set its own policy path which may or may not in convergence with the Fed’s.
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