Morning Dew - 3 December 2014

On Track

JCI remains on track to break its own record high at 5,262 as the index inched higher on Tuesday, following up its gains earlier this week.

PBRX: Sales are expected to increase by 20% to 25% in 2015 as production capacity has been increased earlier this year. The figure is relatively steady compared to this year’s growth of 25%, or about US$424 million in sales. Hence, 2015 target is seen between US$508.8 million to US$530 million. Two new production facilities have been completed and ready for operation this year, raising total production capacity to 42 million units annually. Next year, the company will build two more production facilities in Central Java, costing the company US$8mn-10mn. Capex this year was set at US$40 million with US$20 million to be used for anorganic expansion while the rest will be used for organic expansion.

SRIL: Has prepared US$275 million for financing its expansion plan until 2016. The funding will be used to increase its production capacity which is currently near full utilization.

USDIDR  resumed its climb on Tuesday, hitting 12,276 vs. 12,264 seen on Monday.

TOTL, HITS, INAF

TOTL: In 11M14 the total new contracts obtained have reached Rp6.2tn, exceeding this year’s target of Rp5tn. Breaking down the figure, Rp2.7tn came from KSO projects while non-KSO projects worth Rp3.5tn. TOTL aims at Rp2tn of revenues for this year with the total net profit target of Rp150bn, down from Rp195bn achieved last year.

HITS: To conduct private placement worth around Rp1.63tn by issuing 2.33bn shares set at Rp700 per share.

INAF: Expects to gain Rp40bn in net profit in the coming year.Within the next three years the net profit may reach Rp70bn. Pefindo however, rates INAF’s MTN I/2012 at idBB, down from idBB+ as well as putting it on credit watch with negative implication.

Technically Speaking...

JCI stays on track to breach its all-time high. Still, despite it got as close to breaking the 5,200 mark, the index trimmed some of its gains and settled with smaller gains.

Should the index fails to follow through the recent gains, it will risk returning to the bottom end of the recent consolidation range around 4,900.

We have seen a test of 5,200 resistance, but successful breakout remains elusive. Beyond 5,200, the subsequent resistance will be at 5,251, ahead of the all-time record high at 5,262. 

While MACD remains stable, RSI has reached the overbought area.

Wednesday could bear another attempt to move past 5,200 mark. Overall however, the fluctuation is expected to remain within the familiar trading range between 5,000-5,250. 

MBSS has reached its stop point below 1,050 and thus taken out of the reco pool with a loss of 13.28%.

Day Ahead

New month but hardly any potential surprises on the news front. The next big thing possibly the release of US nonfarm payrolls. Still, the data may not be able to derail the FOMC from entering higher interest rate environment in mid-2015. Domestic calm may put the JCI stable around 5,000-5,262, but with upside bias as the index maintains its chance to set a new record high.

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