Morning Dew - 31 October 2014

And More Earnings…

JCI fell on Thursday after the index rallied in prior session. The setback took the index back to 5,058 or down 0.3% as the consolidation continues within a wide range of 4,900-5,100.

More earnings reports are pouring in as we near the end of October, which is also the deadline for listed companies to submit their 9M14 reports.

BBCA – net interest income for 9M14 climbed 22.9% from Rp24.5t (9M13) to Rp30.1t. Net interest margin improved from 6.0% last year to 6.5%. Net profit grew 17.7%, up from Rp10.4t to Rp12.2t.

ASII – net profit for 9M14 grew from Rp13.46t to Rp14.49t as revenues came in at Rp150.58t, up from Rp141.84t seen last year.

USDIDR barely changed on Thursday as the pair stood at 12,165, slightly up from 12,163 seen on Thursday.

Earnings Season

MYOH – revenues were up to Rp2.25t from Rp1.74t while net profit increased from Rp135.84b to Rp215.47b.

SMCB – net profit for 9M14 decreased to Rp569.69b from Rp599.13b a year earlier despite the revenues grew to Rp7.5t from Rp6.87t.

RALS – revenues slipped in 9M14 to Rp4.63t from Rp4.7t, sending the net profit for the period to Rp339.72b against Rp344.61b seen a year ago.

BSDE – booked net profit of Rp3.21t in 9M14 vs. Rp2.15t in 9M13. Revenues came in at Rp3.91t, down from Rp4.22t seen last year.

Technically Speaking...

JCI slipped on Thursday to end at 5,058 after it hit 5,100 in prior session, 

Downside, the psychological support 5,000 will be the first support, followed by the 200-day EMA at around 4,900 will be the subsequent cushion for the JCI, afterwards support area lies at 4,835-4,840 (prior congestion area).

On the upside, 5,150 is the next resistance, followed by 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD barely changed while the RSI was up slightly.

Upside and downside potentials seem to be in balance as the index is seen returning to its consolidation range between 4,900 and 5,100.

ANTM exit yesterday has brought the open recommendations down to six stocks at the moment.

Day Ahead

More earnings reports are expected this week as the month is closing in. The fuel price hike was said to commence before new year begins but there are still no definite statements regarding how much and when the fuel price will be raised. For now, expect the JCI to continue to gyrate between 4,900 and 5,100. Strong Dow is expected to support the regionals on Friday on the back of solid US GDP report.

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Morning Dew - 30 October 2014

Overseas Boost

JCI rallied on Wednesday, gaining 1.45% to end at 5,074. Overseas sentiment played a part on the rally amidst streams of earnings report ahead of the month-end.

Soechi Lines Indonesia planned to sell 2.57b of new shares or 30% of its capital to raise Rp1.54t to Rp2.05t based on the price range of Rp600 and Rp800 per share. Half of the proceeds will be used for fleets expansion while 25% will be used for loan repayments and the other 25% will be used for working capital. RHB OSK Securities Indonesia and Mandiri Sekuritas have been appointed as underwriters. The company operates in marine transportation business and shipyard industry. 

EXCL recorded net losses of Rp901.2b in 9M14, contrasting the Rp917b of net profit in 9M13 as expenses soared.  Revenues were up from Rp15.81t to Rp17.54t while operating profits were down from Rp1.32t to Rp138.13b.

USDIDR inched higher to 12,163 on Wednesday from 12,158 seen on Tuesday.

Earnings Season

LPPF – 9M14 net profit Rp1.06t vs. Rp899.5b (9M13), revenues Rp6.04t vs. Rp5.11t (9M13).

MIRA – 9M14 revenues fell from Rp131.05b to Rp103.31b, reversing 9M13 net profit of Rp1.2b into net loss of Rp403.43 million in 9M14.

SMDR – 9M14 net profit US$12.8 million vs. US$25,164 (9M13), revenues however, dropped to US$383.32 million (9M14) from US$409.09 million (9M13).

MDLN – 9M14 revenues were up to Rp2.24t from Rp1.4t (9M13), but net profit fell from Rp721.69b to Rp537.85b as finance costs jumped to Rp294.33b from Rp106.94b.

Technically Speaking...

JCI bounced on Wednesday after the index briefly hit below 5,000 in prior sessions, 

Downside, the psychological support 5,000 will be the first support, followed by the 200-day EMA at around 4,900 will be the subsequent cushion for the JCI, afterwards support area lies at 4,835-4,840 (prior congestion area).

On the upside, 5,150 is the next resistance, followed by 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD has turned higher again after it slipped on Tuesday.

While we expect the upside potential remains intact, we cannot rule out pullback after a strong gains on Wednesday. For now, the index is seen returning to its consolidation range between 4,900 and 5,100.

Day Ahead

More earnings reports are expected this week as the month is closing in. The fuel price hike was said to commence before new year begins but there are still no definite statements regarding how much and when the fuel price will be raised. For now, expect the JCI to continue to gyrate between 4,900 and 5,100.

Click here to download the full update (PDF)

Morning Dew - 29 October 2014

Moving On

JCI fell again as investors now shift their focus on the next issue on the agenda: fuel price hike. How much and how soon as well as how to deliver it will be the questions surrounding the market right now as well as how bad will it influence the economy.

Concerns about how the new cabinet will be able to work effectively and efficiently is also among the factors dragging the JCI at the moment.

NISP – net profit increased 12% from Rp838b to Rp942b in 9M14 as net interest income reached Rp2.7t, up 20% from Rp2.3t. 

TOBA – revenues were up to US$389.73 million from US$297.49 million, net profit almost doubled from US$8.74 million to US$17.04 million.

OCAP – recorded net loss of Rp15.79b, as revenues fell from Rp5.54b to Rp5.32b in 9M14.

USDIDR climbed to 12,158 on Tuesday, up from 12,042 seen on Monday.

Earnings Season

CMPP – net profit hit Rp2.67b in 9M14, up from Rp123.42 million in 9M13. Revenues were down from Rp86.12b to Rp81.54b.

ROTI – net profit soared 44.92% in 9M14 to Rp131.66b from Rp90.85b seen last year. Revenues were up from Rp1.05t to Rp1.36t.

RDTX – net profit jumped 24.49% from Rp140.1b to Rp174.42b in 9M14. Revenues were up from Rp302.14b to Rp337.46b.

BAPA – booked net profit of Rp1.54b in 9M14, down from Rp2.45b (9M13) despite revenues were up from Rp20.27b to Rp26.25b.

Technically Speaking...

JCI fell again on Tuesday as the index briefly hit below 5,000, near the 100-day EMA after failing to capitalize on last week rally attempt above the 50-day EMA.

Downside, the psychological support 5,000 will be the first support, followed by the 200-day EMA at around 4,900 will be the subsequent cushion for the JCI, afterwards support area lies at 4,835-4,840 (prior congestion area).

On the upside, 5,150 is the next resistance, followed by 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD has started turn lower while slipped after previously approaching the overbought area.

While we expect the upside potential remains intact, the odds for the index to slip further has also increasingly probable. Nevertheless, the index is seen returning to its consolidation range between 4,900 and 5,100.

Day Ahead

With the political dynamics losing its attraction, the market will move on the next issue on the table: the fuel price hike. Last year’s hike had the economy shaken significantly but this time around the surprise factor is seen less significant as President Jokowi already “socialized” the matter during his presidential election campaign.

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Morning Dew - 28 October 2014

Not Impressed

The market reacted poorly towards the announcement of Jokowi’s cabinet on Monday. The JCI fell almost 1% to end at 5,024, sending the index back to its familiar consolidation range.

As the cabinet issue is passed, the next on the agenda will be on the government’s plan to raise the fuel price. Whether the hike will be by Rp3,000 or not remains to be seen. 

ADRO’s ratings have been affirmed by Fitch at BB+ with stable outlook.

WSKT management said that the target sales worth Rp11.8T this year may be hard to reach. Rather, the company may only achieve around Rp10t this year. Still, the target net profit for this year which is at Rp442b, is still within reach. 

INDX gained net profit of Rp35.73b in 9M14, up from Rp5.76b last year. The jump was propelled by strong revenues which climbed to Rp127.17b from Rp91.77b.

USDIDR slipped a bit to 12,042 from 12,065 on Monday.

Earnings Season

TLKM’s 9M14 revenues were up 7.06% from Rp61.50T to Rp65.84T. Net profit attributable to owners’ entity also increased from Rp11.06T to Rp11.45T.

LRNA’s net profit fell to Rp1.98b from Rp7b in 9M14 while operating revenues fell from Rp120.65b to Rp103.72b.

BRAM reported a rise in sales from US$142.39 million to US$156.76 million in 9M14 while operating profit increased to US$20.06 million from US$5.66 million. Net profit jumped to US$11.95 million, from US$3.2 million, up 272%.

Technically Speaking...

JCI fell again on Monday as the index returned to the lower 5,000s, just hitting the 100-day EMA after failing to capitalize on recent pop above the 50-day EMA.

Downside, the psychological support 5,000 will be the first support, followed by the 200-day EMA at around 4,900 will be the subsequent cushion for the JCI, afterwards support area lies at 4,835-4,840 (prior congestion area).

On the upside, 5,150 is the next resistance, followed by 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD has started to turn lower while slipped after previously approaching the overbought area.

While we expect the upside potential remains intact, the odds for the index to slip further has also increasingly probable. Nevertheless, the index is seen returning to its consolidation range between 4,900 and 5,100.

Day Ahead

The cabinet has been announced and the market doesn’t seem to be upbeat over it. This shifts the focus towards the next issue: fuel price, which is expected to rise this coming November. Elsewhere, no key developments are to be expected from abroad. Earnings season continues on the domestic front and this too will sap the market’s attention for now, sending stocks to tend to move individually.

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Morning Dew - 27 October 2014

All The President’s Men & Women

JCI fell on Friday as investors decided to stand on the sideways waiting for the cabinet announcement which turns out to be announced on Sunday. The inauguration day for the ministers will be on Monday and the cabinet is expected to start working on Tuesday.

And here are key ministers for the new government: Sofyan Djalil as the Coordinating Minister for Economics; Bambang Brodjonegoro as the Finance Minister; Sudirman Said as the Energy and Mineral Resources Minister; Rini Soemarmo Soewandi as the State-Owned Enterprises Minister; Saleh Husin as the Industry Minister; Rahmat Gobel as the Trade Minister; Amran Sulaiman as the Agriculture Minister; and Retno Marsudi as the Foreign Minister.

The President is set to announce the work program for each ministry on Monday.

USDIDR inched higher to 12,065 from 12,034 on Friday.

Earnings Season

APLN’s 9M14 revenues reached Rp3.51T vs. Rp3.48T (9M13). Recurring income grew 32.7% from Rp762.6b to Rp1.01T. Net profit fell to Rp506.5b from 597.5b.

BBMD booked net profit of Rp193.46b in 9M14, down from last year’s Rp259.01b. Net interest income were up from Rp410.95b to Rp434.24b, but operating expenses ex-interest were up to Rp176.43b from Rp62.72b, sending the operating profit down from Rp348.22b to Rp258.81b.

APII recorded net sales of Rp30.63b in 9M14, up from Rp19.25b, while revenues were up from Rp134.76b to Rp182.78b in 9M14.

Technically Speaking...

JCI slipped on Friday towards the 50-day EMA as the rally attempt faltered around 5,100 resistance. 

Downside, the psychological support 5,000 will be the first support, followed by the 200-day EMA at around 4,900 will be the subsequent cushion for the JCI, afterwards support area lies at 4,835-4,840 (prior congestion area).

On the upside, 5,150 is the next resistance, followed by 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD was steady above zero line while the RSI increase has stalled and slipped after approaching the overbought area.

We expect the upside potential remains intact and we could see the index continues to attempt another follow-up rally on Monday.

Week Ahead

Monday will be the first day the market to get the chance to respond to the cabinet announcement. As the uncertainties are cleared, the next focus will be on how the new government will be able to execute its programs smoothly. On top of the list will be the planned rise in fuel price which is expected to jack up inflation just like last year. If this happens, BI may not hesitate to push rate up a bit. Amidst a weakening rupiah, such decision cannot be ruled out at the moment.

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Morning Dew - 24 October 2014

Earnings Deluge

JCI rallied again on Thursday, as speculation over a “clean” cabinet took the index back above 5,100. Still, the index remains vulnerable should the announced cabinet turns out disappointing. Elsewhere, more companies are releasing their 3Q14 earnings and this could lead to individual factor dominating the market instead of the cabinet issue.

AMRT has prepared capex as much as Rp1.8T to Rp2.0T for 2015 to finance 1,000-1,200 new outlets. In the first half 2014 the company has opened 630 new outlets costing Rp900b. The planned addition of new outlets will bring the total number of stores to 9,757 stores. To finance the expansion the company will use internal cash as well as bank loans.

USDIDR inched higher to 12,034 from 12,026 on Thursday.

BTPN recorded net profit of Rp1.38T in 9M14, down from Rp1.67T seen last year. Net interest income fell from Rp5.27T to Rp5.01T while operating expenses were up to Rp3.13T from Rp3.02T. LDR by the end of September 2014 reached 97.31%, up from last year’s 92.39%.

Earnings Season

BMRI’s net profit up 13% in 9M14 to Rp14.5T vs. last year Rp12.8T. Net interest income jumped 26.5% while credit growth reached 12.4% to Rp506.5T vs. last year’s Rp450.8T.

WOMF saw net profit fell from Rp44.69b to Rp41.07b in the first 9 months of 2014. Total revenues were up to Rp1.24T from Rp1.17T seen last year and total expenses were up from Rp1.12T to Rp1.18T. 

In the first 9 months of 2014 UNVR managed to book net profit of Rp4.04T, slightly below last year’s Rp4.09T. Operating income fell to Rp5.48T from Rp5.49T.

Technically Speaking...

JCI  continued to climb on Thursday and managed to claw its way back above 5,100.

Downside, the psychological support 5,000 will be the first support, followed by the 200-day EMA at around 4,900 will be the subsequent cushion for the JCI, afterwards support area lies at 4,835-4,840 (prior congestion area).

On the upside, 5,150 is the next resistance, followed by 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD continued to tick higher above zero line while the RSI has turned higher after spending some time on the neutral zone.

We expect the upside potential remains intact and we could see the index continues to attempt another follow-up rally on Friday.

Day Ahead

There’s still uncertainties surrounding the announcement of the cabinet. Meanwhile, as we approach the end of the month, more companies will release their 3Q14 results. There is still the risk for the index to turn lower should the cabinet turns out to be less favored. Strong gains in US stocks should give some support to the JCI on Friday.

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Morning Dew - 23 October 2014

Awaiting the Cabinet

JCI rallied on Wednesday on partly on strong gains from abroad as well as speculation over a favorable cabinet set to be announced by Jokowi in the evening.

It turned out the cabinet announcement was delayed with no clear explanation about the cancellation. The market continues to speculate on the names of the ministers while also worries about possible interferences behind the announcement delays. This may not be good for the JCI outlook on Thursday considering external factor such as falling US stocks.

The trio of major US indexes ended in the red with the Dow fell 0.92%, the S&P 500 slipped 0.73% and the NASDAQ tripped 0.83%. Profit-taking is likely to be the trigger behind the US equities drop, considering recent solid gains.

USDIDR bounced to end at 12,026 on Wednesday after it fell to 11,993 on Tuesday.

Earnings Season

BBRI recorded profit worth Rp18.12T during the first nine months in 2014, up 19% from last year’s 9M13 Rp15.23T. Total credit reached Rp464.19T by the end of September 2014 or up 12.32% against last year’s Rp413.27T.

BNII’s 9M14 net profit was down from Rp1.1T (9M13) to Rp339.74b as operational costs jumped 57% (yoy). Net interest income were up from Rp4.13T to Rp.4.33T.

AISA has readied Rp676b to be used for expansion next year. The capex amount is 49.7% higher than the amount set this year (Rp676b).

Technically Speaking...

JCI  turned higher on Wednesday and settled at 5,074 after previously fell to as low as 5,016.

Downside, the psychological support 5,000 will be the first support, followed by the 200-day EMA at around 4,900 will be the subsequent cushion for the JCI, afterwards support area lies at 4,835-4,840 (prior congestion area).

On the upside, 5,100 is the next resistance, followed by 5,150, 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD continued to tick higher above zero line while the RSI has turned flat after recent rise.

We expect the upside potential remains intact and we could see the index continues fluctuates between 5,000 and 5,100 on Thursday.

Day Ahead

The delay of cabinet announcement and the poor showings on the US equities may push back JCI back to the red this Thursday. There is still uncertainties surrounding the cabinet announcement, but it is likely within this week. A widely accepted cabinet will boost JCI and could spring it back beyond 5,100 while a less favorable cabinet could set up another fall for the index.

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Morning Dew - 22 October 2014

Stumbling Block

Euphoria faded with the JCI ended 0.22% lower on Tuesday, a day after the inauguration day of the 7th Indonesian president Joko Widodo. The fall might have been triggered by the delay of the announcement of the new cabinet. The cabinet composition holds the key to the next path of the JCI with a market-friendly cabinet could boost the index and put it back on track of scoring new heights. On the other hand, if the cabinet is not market-friendly, the JCI could backtrack below 4,900.

Blue Bird has set the initial offering price at Rp6,500 per share, significantly lower than its previous indicative price of Rp7,200-Rp9,300 per share.  With the new set price, Blue Bird aims to raise Rp2.4T (vs. initial target of Rp4.94T) from the IPO. The taxi operator will offer 376.5 million shares or 14.2% of its enlarged capital which is scheduled to be listed on November 3rd 2014.

USDIDR fell further to 11,993 from Friday’s close of 12,041.

Earnings Season

ASDM’s 9M14 revenues were up to Rp122.75b from last year’s Rp112.56b, bringing the net profit to Rp24.23b for the 9M14 from Rp18.12b see a year earlier.

PEGE’s 9-month net profit increased to Rp21.63bn from Rp16.69bn seen a year earlier.

ARNAs revenues were up to Rp1.19t against the prior year’s Rp.1.03t.

TCID expects sales to grow 10% in 3Q14 from 3Q13 to Rp1.71T. Sales abroad so far have reached about 30% of total sales with the company currently aims at countries in Indo China as its expansion targets.

Technically Speaking...

JCI  fell to as low as 5,016 on Tuesday and settled the day down 0.22% from Monday’s close.

Downside, the psychological support 5,000 will be the first support, followed by the 200-day EMA at around 4,900 will be the subsequent cushion for the JCI, afterwards support area lies at 4,835-4,840 (prior congestion area).

On the upside, 5,100 is the next resistance, followed by 5,150, 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD continued to tick higher above zero line while the RSI has turned flat after recent rise.

We expect the upside potential remains intact and we could see the index heads back toward 5,100.

Day Ahead

Strong showing on the US and the European fronts could send the Asian stocks up on Wednesday, including the JCI. The setback seen yesterday was expected to have been triggered by the delay of cabinet announcement. Despite various speculations over the names, we may eventually see the cabinet announced this week.

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Morning Dew - 21 October 2014

The 7th

The inauguration day of the new president Joko Widodo and the new vice-president Jusuf Kalla went smoothly on Monday. Such enthusiasm of the people could be a sign of better times ahead, while not necessarily immediate.

Nevertheless, the JCI scored an intraday high at 5,101.21 but could not hold on to its gains and slipped to end at 5,040.53, up 0.23% for the day. 

After the inauguration day, the next thing on the watchlist is the names of the ministers of Jokowi’s cabinet. It is likely to be announced as soon as Tuesday. The market response will be the key to the next path of the JCI. A friendly list will help the JCI to weather the upcoming challenges such as the impact of an upcoming fuel price hike and also the influence of the coming of a higher interest rate environment triggered by the US Federal Reserve policy.

USDIDR fell to 12,041 from Friday’s close of 12,222.

Earnings Season

LINK booked revenues of Rp1.55t in 9M14, up 28.2% from 9M13 which recorded revenues of Rp1.20t.

HOME incurred Rp4.52b of losses in 9M14 against gains booked in 9M13 worth Rp1.82b. Revenues fell to Rp38.86b from Rp42.82b while expenses were up from Rp24.74b to Rp27.7b.

MDRN signed strategic partnership with CIMB Private Equity worth US$25 million as the Malaysian company acquired a minority stake through newly issued shares representing 10% of the existing share capital of MDRN.

BSDE booked marketing sales worth Rp5t, completing 83% of the target sales for this year.

Technically Speaking...

JCI  briefly reached 5,101.21 on Monday but the rally fizzled as the index eventually settled at 5,040.53, up 0.2% for the day but a disappointing close as it lost around 1% from Monday’s open.

Downside, the 200-day EMA at around 4,900 will be the near-term cushion for the JCI, while subsequent support area lies at 4,835-4,840 (prior congestion area).

On the upside, 5,100 is the next resistance, followed by 5,150, 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD continued to tick higher, finally arriving above zero line. The RSI has started to curl back up and headed back towards the overbought area.

We expect the upside potential remains intact on Tuesday and we could see the index heads back toward 5,100 and possibly all the way to 5,150.

Day Ahead

Tuesday is seen flat to mildly positive as euphoria over Jokowi’s inauguration day dims. The next hurdle for the JCI now will be the announcement of the names of Jokowi’s ministers. Jokowi is expected to announce the names soon sometime this week. Still, the new government may start on a rough side of the road as fuel prices may rise sometime between November or December. 

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Morning Dew - 20 October 2014

Winds of Change

JCI jumped on Friday as the market appreciated the meeting between the elected president Joko Widodo with his former rival Prabowo Subianto. The meeting was seen as an elixir which relieves concerns over potential efforts to thwart the inauguration of the new president on October 20th. As the two met, the political tension seemed to have eased considerably, triggering a new hope that the next government will be able to run smoothly.

While the tension has been reduced, risk remains until the event is completely passed. Should the inauguration day ends smoothly, the JCI is expected to gain the upper hand and we may even see the index to erase recent losses and continue its march north.

USDIDR turned higher on Friday, up from 12,207 to 12,222.

BJBR set Taufiequrachman Ruki as the candidate for the position of President Commissioner. The candidacy of the former KPK Chief has been submitted to OJK, awaiting result of the fit and proper test.

Stimulus Hope

European Central Bank official said that the central bank will start “within the next days” to purchase assets in a new program aimed to support the economy. The statement launched the European stocks higher.

A day earlier, Fed’s James Bullard said that the FOMC should consider delaying the end of bond-buying.

We should note that the conditions in the US and Europe are not the same, and that Europe needs the stimulus while the US might have enough of it.

US University of Michigan Confidence index for October (preliminary) went up to 86.4 from 84.6, defying consensus of a drop to 84.0. Not only it was an upside surprise, the figure was actually the strongest since July 2007.

Technically Speaking...

JCI  climbed back to regain its footing above 5k mark. The index managed to hit the intraday high at 5,043 on Friday, closing just above the 100-day EMA.

Downside, the 200-day EMA at around 4,900 will be the near-term cushion for the JCI, while subsequent support area lies at 4,835-4,840 (prior congestion area).

On the upside, 5,100 is the next resistance, followed by 5,150, 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD continued to tick higher, approaching the zero line. The RSI has started to curl back up.

We expect the upside potential remains intact on Monday and we could see the index heads toward 5,100 and possibly all the way to 5,150.

It looks like WSKT will have to be scrapped soon as the stock reco is currently closer to its target price at 1,000. For now, we are keeping it open, however.

Week Ahead

Monday will be the inauguration day for Joko Widodo, the 7th president of Indonesia. The market will cheer if everything goes smoothly, defying some worries that the inauguration day will be “sabotaged” by some people. We expect the inauguration will proceed smoothly. A day afterwards, the president is expected to announce his cabinet, which could be closely watched by investors.

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Morning Dew - 17 October 2014

Back and Forth

JCI took a step back on Thursday but still confined within the 4,895 and 5,023 in the short-term.

We continue to expect the index to trade between 4,895 and 5,023 in the short-term. One major domestic event will be the announcement of the new cabinet by Jokowi scheduled a day after the inauguration of the new president. 

James Bullard, one of the Fed’s officials,  urged the central bank to maintain its bond-purchasing program in this month’s meeting. While a supposedly positive thing for stocks, one opinion alone is not strong enough to sway the Fed from removing the stimulus completely this month and to start raising rates sometime in mid-2015. US stocks were somewhat muted upon the comment, but was unable to dodge the red on Thursday.

USDIDR ticked down to end at 12,207 compared to 12,229 seen on Wednesday.

BDMN, ANJT, SSIA

BDMN posted a 30% drop in net profit in the first 9-month of 2014 from Rp3T to Rp2.1T. The third quarter is considered as a challenging moment for the Indonesian economy as slipping commodities and the weakening of exports have limited the room for business expansions.

ANJT acquired 100% of Pusako Agro Makmur on October 15th 2014. The acquired entity is a CPO plantation company which is situated in the West Papua.

SSIA acquired new contracts worth Rp2.35T as well as recorded land sale of 22.8ha. For 9M14, SSIA’s new contracts have reached 63.5% of the targeted Rp3.7T worth of new contracts. Industrial land sale for 9M14 has reached 57% of target.

Technically Speaking...

JCI  stayed within the familiar range between the 200-day and 100-day EMAs (4,895 and 5,023, respectively) on Thursday.

Downside, the 200-day EMA at around 4,900 will be the near-term cushion for the JCI, while subsequent support area lies at 4,835-4,840 (prior congestion area).

On the upside, the psychological level of 5k will be the first hurdle, while 5,100 is the next resistance, followed by 5,150, 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD continued to tick higher, approaching the zero line. The RSI has started to curl back up. Volume was up on Thursday.

It looks like WSKT will have to be scrapped soon as the stock reco is currently closer to its target price at 1,000. For now, we are keeping it open, however.

Day Ahead

While James Bullard’s statement about the Fed’s policy may present a relief for stocks, his opinion alone may not be enough to derail the Fed from its path to remove the bond-purchasing program this October as well as starting to raise the rates sometime in mid-2015. The market will also put the Jokowi’s inauguration and cabinet announcement next week.

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Morning Dew - 16 October 2014

Not Out of the Woods Yet

JCI continued to rise on Wednesday after briefly touched 4,900 on Tuesday.  The bounce however, is seen capped at around 5,000 as the outlook continues to be gloomy.

We continue to expect the index to trade between 4,895 and 5,035 in the short-term. One major domestic event will be the announcement of the new cabinet by Jokowi scheduled a day after the inauguration of the new president. After being hit by IEA’s forecast downgrade, the US stocks remain vulnerable. Early session drop took the Dow down almost 3% before the losses were trimmed to ‘just’ 1.06%.

Coal miners continue on the defensive following the China’s move to reinstate coal import tarrifs in a move to protect Chinese miners. The levy will be as much as 6% while anthracite and coking coal got 3%. ITMG lost slightly over 11% on Wednesday while the mining sector retreated nearly 3%.

USDIDR jumped to end at 12,229 compared to 12,195 seen on Tuesday.

PSAB, UNTR

PSAB plans to issue bonds worth US$300 million. The funds raised from the bonds will be used to pay debts worth US$275 million. PSAB will issue the bonds next December through its subsidiary PT Sogo Prima Pratama with maximum coupon rate set at 10% p.a.

UNTR is set to take over the majority shares of ACST. Two ACST shareholders, PT Loka Cipta Kreasi & PT Cross Plus Indonesia are to shift their 250,500,000 shares of ACST to UNTR or the appointed subsidiary of UNTR, according to the MOU signed on October 10th 2014. The move is considered as a move to diversify UNTR’s business and to support the core business of UNTR.

Technically Speaking...

JCI continued to bounce on Wednesday after a day earlier the index briefly tested the 200-day EMA support at roughly 4,900.

Downside, the 200-day EMA at around 4,900 will be the near-term cushion for the JCI, while subsequent support area lies at 4,835-4,840 (prior congestion area).

On the upside, the psychological level of 5k will be the first hurdle, while 5,100 is the next resistance, followed by 5,150, 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD ticked higher, but still struggling below the zero line. The RSI languishes around the oversold area but started to get flat. Volume was slightly higher on Tuesday.

Day Ahead

Sharp drop in US equities as well as European ones are posing risks for the JCI to take another hit on Thursday. Perhaps the only thing on the horizon that could lift up the souring mood will be if Jokowi announces his cabinet on 21st October, a day after his inauguration day. For now, the bias is towards the downside while 5k caps the upside. We’re definitely not out of the woods just yet.

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Morning Dew - 15 October 2014

The Game Changer

JCI rebounded after initially fell on Tuesday. The index eventually gained 0.2%, but the outlook remains vulnerable right now.

We expect the index to trade between 4,895 and 5,035 in the short-term while market will keep searching for fresh positive catalyst to jump back into action. One major domestic event will be the announcement of the new cabinet by Jokowi. A solid and convincing cabinet composition could be the game changer for JCI as this will be seen as proof how far Jokowi is going to compromise with the current political situation.

US stocks trimmed gains overnight after early gains were hampered by falling energy stocks. International Energy Agency recently cut the demand growth forecast for 2015 by 100k barrels a day to 1.1 million. For this year, oil consumption will rise by about 650k barrels a day, 250k less than earlier estimate, IEA said.

USDIDR slipped to end lower at 12,195 compared to 12,202 seen on Friday.

HITS, BBRM, RAJA

HITS revenues were up 14.76% to US$31.73 million in the first 6 months of 2014 vs. US$27.65 million booked a year ago. Profit for the period however, were down from US$2.25 million to US$503.59k.

BBRM’s nine-month revenues were lower at US$25.03 million compared to last year’s US$27.13 million. Net profit attributable to owners were down to US$534.83k from US$4.76 million last year.

RAJA aims at net profit of US$7.68 million this year and US$9.50 million next year. Revenues are expected to reach US$200.35 million this year while next year to reach US$245.74 million as volume of gas sales from subsidiary rises.

Technically Speaking...

JCI took a breather on Tuesday after repeatedly battered during recent sessions. The index fell briefly to test the 200-day EMA at 4,900 before it bounced and settled slightly higher.

Downside, the 200-day EMA at around 4,900 will be the near-term cushion for the JCI, while subsequent support area lies at 4,835-4,840 (prior congestion area).

On the upside, the psychological level of 5k will be the first hurdle, while 5,100 is the next resistance, followed by 5,150, 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD ticked higher, but still struggling below the zero line. The RSI languishes around the oversold area but started to get flat. Volume was slightly higher on Tuesday.

Day Ahead

Despite bouncing US stocks and a breather from the domestic side, the outlook for JCI remains vulnerable, especially on the technical point of view. With hardly any positive catalysts around we expect the JCI to remain at risk on Wednesday, but probably going to stabilize around 4,900-5,000 area.

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Morning Dew - 14 October 2014

The Awakening

JCI was off to a poor start as the week opened with another drop, sending the index closer to the 4,900 handle. Poor domestic sentiment coupled with sliding US stocks have somewhat awakened the bear.

We expect the index to trade between 4,895 and 5,035 in the short-term while market will keep searching for fresh positive catalyst to jump back into action.

On the global front, the US stocks continued its poor performance overnight, with the Dow slipped again for more than 200 points and S&P500 fell below its 200-day moving average. In the commodities market, oil continues to fall after last week it entered the bear market. Recent comment from the Fed’s Stanley Fischer has cast concern that the Fed may delay the timing of interest rate hike should the global economy slowing down.

USDIDR was slightly lower at 12,202 compared to 12,207 seen on Friday.

APLN, CTRP, HERO

APLN booked marketing sales of Rp3.53T during first nine months of 2014.  Harco Glodok and Orchard Park Batam have contributed 25.7% and 24.8%, respectively.  Other key contributions came from Podomoro City Extension (13.1%) and Plaza Kenari Mas (6.5%).

CTRP expands to budget hotel business in several areas in Indonesia. Through its subsidiary, Ciputra Hospitality, two budget hotels are already operational in Cirebon and Semarang. Within the next three years there are 30 budget hotels that are to be built around the country, costing about Rp1.5T.

HERO is about to open the first IKEA store in Indonesia in Alam Sutera this mid-October.

Technically Speaking...

Another fall took the index closer to the 4,900 handle as the weakness persists.

Downside, we are staring at the risk of deeper selloff towards the 200-day EMA at around 4,895, with subsequent support area at 4,835-4,840 (prior congestion area).

On the upside, the psychological level of 5k will be the first hurdle, while 5,100 is the next resistance, followed by 5,150, 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD turned lower, moving away from the zero line while the RSI languishes around the oversold area. Volume ticked lower on Monday.

ADRO has been removed from the reco list as it fell below the stop level.

Day Ahead

On the menu we got weak US stocks overnight, we got Ebola scare, recent IMF’s warning of frothy stock valuations, concerns over domestic political dynamics, persistently weak Rupiah, and vulnerable technical outlook of the JCI. With hardly any positive catalysts around we expect the JCI to take another beating on Tuesday, probably pushing it even closer to 4,835-4,840.

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Morning Dew - 13 October 2014

Bear Season

As expected, the JCI saw another red on Friday, tracking the losses of US equities. Barely any positive catalysts were present at the moment, while negative catalysts were abound.

Political woes from the domestic side has made investors’ appetite turned sour as the market is wondering whether the next government will be able to work smoothly without getting harassed.

On the external side, the end of Fed’s tapering campaign looms large as October may be the end of Fed’s bond-buying program. The Fed is expected to cool down for about six months before embarking on a “rate normalization” step by raising the Fed funds rate sometime mid-2015. Ebola scare, recent French’s credit outlook downgrade, dire outlook of EU economy, IMF’s warning of frothy stock valuations, as well as geopolitical tensions, all have dogged  JCI’s performance.

Meanwhile, USDIDR was up at 12,207 on Friday compared to 12,190 seen on Thursday.

SMGR, MICE

SMGR is eyeing expansion to the property business by developing a 450ha land in Gresik, East Java. The company plans to build a residential and recreational area including the construction of cement museum and recreational park. For this purpose, the company will join up with WIKA and some other state-owned construction companies.

MICE is set to pay the final cash dividend for FY13 on November 14th. The amount to be paid will be Rp6b or equal to Rp10 per share. Recording date is set for Nov 3rd 2014, with cum and ex dividend for regular and negotiation market set for 29th and 30th Oct 2014, respectively. Cum and ex for cash market is set for 3 and 4 Nov 2014, respectively.

Technically Speaking...

JCI remains vulnerable as it slipped back on Friday, taking it farther from the 5k mark.

Downside, we are staring at the risk of deeper selloff towards the 200-day EMA at around 4,895, with subsequent support area at 4,835-4,840 (prior congestion area).

On the upside, the psychological level of 5k will be the first hurdle, while 5,100 is the next resistance, followed by 5,150, 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD ticked higher, moving back towards the zero line while the RSI hovers around the oversold area. Volume ticked down on Friday.

Week Ahead

After a stormy week, we expect the coming week will be somewhat cooler. The JCI is seen gyrating between 4,895 and 5,035 the area between the 100-day and 200-day EMA with potential additional room on the upside at 5,090 (50-day EMA). The market will put a close watch on the external factors such as Ebola, geopolitics in Ukraine and mid-East, as well as domestic front, especially on the next cabinet composition.

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Morning Dew - 10 October 2014

Seeing Red

JCI continued its close track on the US stock indexes’ movement on Thursday, scoring gains after getting slammed a day earlier. While we have a green day on Thursday, unfortunately if the recent behavior continues this Friday, we are staring at another fall off the cliff.

US stocks’ yo-yo run had S&P500 index produced a 1.5% plunge on October 7th, but on the 8th it scored a comeback with a solid 1.8% gains. Overnight however, the S&P crashed 2.1% while the Dow nosedived 1.97%. And we definitely know what to expect this Friday morning in Asia, don’t we?

USDIDR was slightly lower at 12,190 on Thursday compared to 12,241 seen on Wednesday.

Elswhere, Karisma Aksara has decided to postpone its plan to go public this year. No further details on this issue. Originally, the company planned to offer its shares at Rp175-240 per share, aiming at gaining Rp93.7b to Rp128.6b for expansion and debt repayment purposes.

The Roadmap

Recent rollercoaster ride of US stocks has dragged the global stocks along with it, including the JCI. We see various factors blamed for such behavior. From the Fed’s stance, the Ebola, IMF’s frothy stocks theory, global geopolitical tensions, jobs report, Europe’s growth expectation, and a myriad of other factors. 

We have our own roadmap on this. We see the Fed will end its bond-purchasing program this year, most likely in October. A six-month pause will be used by the Fed to prepare the market while monitoring macro factors such as jobs outlook as well as inflation. Fast forward, we will arrive in April when the six-month hiatus ends, staring at the Fed ready to pull the rate-hike trigger.

Technically Speaking...

Yo-yo behavior took the index back up but short of returning above 5k mark.

Downside, we are staring at the risk of deeper selloff towards the 200-day EMA at around 4,885, with interim supports lie at 5,000 (psychological) and 4,933 (recent trough).

On the upside, the psychological level of 5k will be the first hurdle, while 5,100 is the next resistance, followed by 5,150, 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. 

The MACD ticked higher, moving back towards the zero line while the RSI hovers around the oversold area. Volume has been stable so far.

Day Ahead

Not much to say as we obviously see a big pool of red this Friday after the Dow ended almost 2% down or more than 300 points drop overnight. Domestic negative catalysts also will put a check on the JCI’s potential strength after yesterday’s rally. Fasten your seat belt for another rollercoaster ride!

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Morning Dew - 3 October 2014

Crash and Burn

JCI nosedived on Thursday as the index was under siege by myriads of factors both domestic and abroad. All sectors were down, with the JCI fell nearly 3%.

From Ebola scare which sparked earlier selloff on the global front, to the political tempest from within our own backyard, the index is also fell victim from the recent decline in rupiah against the greenback as the end of low interest rates environment in the US is coming to an end.

USDIDR slipped further a bit, but stayed above 12k on Thursday, ending at 12,136 compared to 12,188 seen on Wednesday. 

Still trying to recover from recent hammering, the Dow managed to fight back on Thursday, trimming initial session decline of around 1% before ending the day down by 0.02%

SILO, AMRT

SILO plans to build another four hospitals this year and next year. The company expects the expansion to raise income by 35% to 40% each year. One hospital is planned to be opened in Medan (this month) while another in Kupang (November 2014). The other two are still pending construction next year. The cost to build one hospital is estimated around Rp200b-300b.

AMRT is also targeting expansion by opening 800 to 1,200 new outlets throughout 2014, costing the company between Rp1.8t to Rp2t. The company said the financing will come from both internal funding and bank loans.

Technically Speaking...

JCI sliced through its lines of supports as the key support at 5k was briefly broken. As the index went off its track and away from its consolidation between 5,100-5,262, the outlook remains cloudy at the moment.

Downside, we are staring at the risk of deeper selloff towards the 200-day EMA at around 4,885. Of course, the 5k line is still effective, but weakened due to recent selloff.

On the upside, prior support at 5,100 now turned as near-term resistance, followed by 5,150, 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. Subsequently, the next psychological hurdle for the index at 5,300. 

The MACD fell sharply while the RSI is approaching the oversold area. While volume was fading during the selloff, we cannot rule out another run to the south. 

For short-term, expect the index to stage a bit of correction. Upside is expected to be capped at 5,100 for now, but the downside is also seen cushioned around 5,000.

BRNA has been filled, leaving WSKT as the remaining open reco. ADHI unfortunately, tripped its stop and exited at 8.96% losses.

Day Ahead

JCI has been derailed from its recent consolidation range of 5,100-5,262 as the index briefly fell below the 5k mark before ending the day slightly above 5k. Equities abroad remain vulnerable, but so far another onslaught may be off the table for now, providing support for JCI on Friday. We expect the JCI to stabilize with limited recovery on Friday.

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Morning Dew - 2 October 2014

Timid Inflation

JCI ended slightly up amidst lack of fresh catalysts. Weak sentiment has weighed on the index recently due to political tempest on the domestic front. In addition, expectation of higher Fed rates has also hurt rupiah, adding more bad sentiment for the index.

USDIDR slipped a bit, but stayed strong on Wednesday, ending at 12,188 after finishing at 12,212 on Tuesday. 

Inflation was modest in September at 0.27% (m/m), but showed acceleration to 4.54% on year-on-year basis. Higher electricity price is cited as the trigger along with higher prices of processed food and beverage. Core inflation slowed to 4.04% (y/y). BI kept its target range for this year between 3.5 and 5.5%.

Ebola scare hammered US stocks as the Dow plunged more than 200 points overnight. 

Back to Deficit

Trade balance returned to deficit of US$318.1 million in August after a US$50 million surplus in prior month. Oil and gas imports rose and took the sector to a US$800 million deficit, in contrast with the US$490 million surplus in the non-oil & gas sector.

Total exports in August was US$14.48b, imports at US$14.79b. The eight-month balance of trade was at a deficit of US$1.4b.

Another data due on Wednesday was the HSBC Markit PMI for the manufacturing sector. In September the index bounced to 50.7 from 49.5 seen in August.

Technically Speaking...

JCI continued its consolidation within the recent range of 5,100-5,262. Despite the small gains on Wednesday, the outlook remains murky right now.

As we mentioned earlier, the JCI is at risk of heading towards the next supports at 5,039 and 5,000 as the 50-day EMA has been recently punctured.

On the upside, near-term resistance lies at 5,150, followed by prior resistance at 5,200 and another one at 5,251, ahead of the all-time record high at 5,262. Subsequently, the next psychological hurdle for the index at 5,300. 

Taking guidance from the indicators, the MACD continues to move away from the zero line; the RSI has stopped sinking for now, while volume is slipping a bit. For now,  we can expect the index to maintain its position within 5,100-5,262 consolidation range, but this time with short-term downside bias.

BRNA added, with WSKT stays as an open reco pending entry. BRNA is recommended at 735-755, with risk below 675 and target set at 950, about 25% upside potential.

Day Ahead

JCI is still seen struggling within a wide consolidation range of 5,100-5,262. Equities in the U.S. has been severely hit with the Dow fell more than 200 points due to Ebola scare, hurting sentiment even more. Lack of positive yet fresh catalysts, 200+ dive abroad, as well as domestic political factor will put a cap on JCI.  The bias is down for Thursday.

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