PADI Research: July In Review

DISCLAIMER

This research report is prepared by PT MINNA PADI INVESTAMA Tbk for information purposes only and are not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. The report has been prepared without regard to individual financial circumstance, need or objective of person to receive it. The securities discussed in this report may not be suitable for all investors. The appropriateness of any particular investment or strategy whether opined on or referred to in this report or otherwise will depend on an investor’s individual circumstance and objective and should be independently evaluated and confirmed by such investor, and, if appropriate, with his professional advisers independently before adoption or implementation (either as is or varied).

Kamis, 31 Juli 2014

July In Review

Market Issues

Election Euphoria

Joko Widodo & his running mate, Jusuf Kalla have won the presidential election as the pair won almost 71 million votes (53.15%) against Prabowo Subianto – Hatta Rajasa’s total tally of 62.5 million votes (46.85%). The result which was announced by KPU has been challenged by Prabowo-Hatta and the dispute has been brought in to the Constitutional Court (MK). The Court will make its final decision on August 21st 2014. The initial announcement has brought euphoria to the stock market, taking the index to as high as 5,165 before it settled the month at 5,088.

Geopolitical Flashpoints

Gaza and Ukraine have become recent geopolitical spotlights. Israeli’s attacks on Hamas have claimed many lives of civilians while the downing of a Malaysian passenger airliner by missile shot by pro-Russian Ukrainian rebels has probably ignited what could’ve been the seed of the next Cold War between the West and Russia. These two events may not deliver direct damage to the market, but worsening conflict may see spillover eventually.

New Stocks on the Block

Five newcomers in July were MGNA, BPII, MBAP, TARA and DNAR. The initial offering price for each of the five were105, 500, 1,300, 106, and 110, respectively. At Rp279 per share, TARA gained the most until the end of the month as the stock racked up a 163.21% gains over its initial price. DNAR was second placed with 77.27% gains, MGNA was third (+8.57%), BPII was fourth (+5%) while MBAP still in the red as it lost 0.38%.

Fed Stayed On Course

Overseas, the latest Fed meeting showed no change in tapering. By now, the bond buying amount has been reduced to $25bn after the sixth tapering in a row by the Fed. In October, it is expected to remove the bond buying from the market.

Argentina In Default

Standard & Poor’s put Argentina into default as the government missed its interest payment of $13 billion of structured bonds.

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