Morning Dew - 28 February 2014

Fighting Back

JCI bounced off 4,530 and fought back to end the day at 4,568.94. All the sectors were up, led by agriculture sector.

In her testimony before the Senate, the new Fed chief Janet Yellen reiterated the Fed’s stance on its tapering strategy. The tapering will be continued as long as no serious economic setback happens.

Elsewhere, the US durable goods orders declined 1% in January. Still, the reading was better than consensus.

USDIDR inched higher to 11,675 from 11,669 on Wednesday.

ARNA, KAEF and SMCB

ARNA booked a 50% gains in net profit throughout 2013 as its revenue jumped 27.30%. Assets and liabilities were up 21.11% and 10.29%, respectively during the period.

Net profit were up by 4.59% at KAEF during 2013. Revenues were up 16.44% while assets and liabilities grew 19.05% and 33.52%, respectively.

Cement producer SMCB’s net profit fell almost 30% as its revenues were only up by 7.49%. Liabilities jumped 63.23% and assets gained 22.41%.

Technically Speaking...

JCI bounced off 4,530 and ended the day up after being battered for three days in a row. 

Recent peak-turned-support at 4,477 will be the nearest key support line for JCI, whereas the 200-day EMA at 4,440 will be the subsequent support area. Nearer support will be at 4,510 as this was the prior resistance-turned-support.

Nearest resistance is seen at around 4,665, Friday’s high. Meanwhile, 4,791 will be the next hurdle to crack should 4,650 gives way.

MACD continued to tick down, capping the upside potential at the moment while volume gradually ticks up. RSI has made its turn lower, but still near the overbought area. Positive Dow overnight may provide some cushions for JCI this Friday.

Day Ahead

Post-strong gains in Thursday trade may provide another room to rise for JCI. Still, with limited positive and negative catalysts for the index, the upside will be somewhat limited. More companies are to report their 2013 results.

Click here to download the full update (PDF)

Morning Dew - 27 February 2014

Lack of Catalysts

Weakness continued to hit the JCI on Wednesday as the index skid for nearly another 1% to end at 4,532.72. 

There is hardly any fresh catalysts from both domestic and overseas at the moment, which could be the trigger for some profit-taking actions seen recently.  As we are closing in towards the general election, politics will slowly gaining prominence in investors’ mind sooner or later.

On the corporate front, the earnings season continues to unfold as more companies are reporting their 2013 performance results.

USDIDR bounced to 11,669 from 11,620 on Wednesday.

MLPL & MPPA

MLPL reported a sterling performance for 2013. Net profit jumped to 1,415,091 million IDR from 28,636 million, while revenue advanced 16.05%. Assets and liabilities  were  up by 43.77% and 60.31%, respectively.

MPPA’s net profit climbed 101.73% to IDR444,905 million in 2013. Revenue rose 9.61%. Both assets and liabilities were down by 20.01% and 25%, respectively.

Technically Speaking...

The rout continued on Wednesday, sending the JCI to 4,532.72 or down for another 1% after a while back reached 4,665. 

Recent peak-turned-support at 4,477 will be the nearest key support line for JCI, whereas the 200-day EMA at 4,440 will be the subsequent support area. Nearer support will be at 4,510 as this was the prior resistance-turned-support.

Nearest resistance is seen at around 4,665, Friday’s high. Meanwhile, 4,791 will be the next hurdle to crack should 4,650 gives way.

MACD continued to tick down, capping the upside potential at the moment while volume gradually ticks up. RSI has made its turn lower, but still near the overbought area. Positive Dow overnight may lend a boost to JCI this Thursday.

Day Ahead

JCI is still expected to rebound after some sharp falls. Lack of new catalysts is likely to send stocks searching for directions from earnings report still in progress at the moment. Rebound in US stocks overnight after a solid new home sales data may provide some footing for the JCI.

Click here to download the full update (PDF)

Morning Dew - 26 February 2014

Deeper Retreat

Post-breakout of key resistance on Friday, JCI fell again to end the day at 4,577. For now, this is viewed  as a natural setback for the index. 

Some positive catalysts recently released were the improving CAD (hence lessened the odds that BI will raise rate again), the improving IDR, Bank of Japan’s continued stimulus, and Fed’s Janet Yellen’s statement that the tapering policy will continue on.

USDIDR fell to 11,620 from 11,728 on Tuesday.

ASGR & MFMI, US Consumer Confidence

ASGR reported its net profit jumped 22.09% in 2013 from 2012. Its assets and liabilities grew 17.02% and 17.74%, respectively. Revenues were up by 9.55%.

MFMI reported less stellar results as its assets only grew 5.64% while its liabilities have been trimmed by 12.13%. Revenues were up by 7.38%, net profit advanced 9.38%.

US consumer confidence slipped from 79.4 in January to 78.1 in February. The figure missed the consensus which forecast an uptick to 80.0.

Technically Speaking...

JCI continued its fall on Tuesday as it hit the low of 4,567 before ending the day at 4,577.

Recent peak-turned-support at 4,477 will be the nearest key support line for JCI, whereas the 200-day EMA at 4,440 will be the subsequent support area. Nearer support will be at 4,550 as this was the congestion area before the index rallied.

Nearest resistance is seen at around 4,650, Friday’s high. Meanwhile, 4,791 will be the next hurdle to crack should 4,650 gives way.

Volume and MACD continued to tick down, capping the upside potential at the moment. For now, the outlook is biased to the downside as recent gains spells a near-term correction.

Day Ahead

JCI is expected to rebound after some sharp falls. Lack of new catalysts is likely to send stocks searching for directions from earnings report still in progress at the moment. Mixed Recently released US data are seen neutral for now. Weakness in US stocks overnight may cap the JCI.

Click here to download the full update (PDF)

Morning Dew - 25 February 2014

Stepping Back

Post-breakout of key resistance on Friday, JCI fell to end at 4,623.57. Still, this is viewed  as a natural setback for the index. 

Some positive catalysts recently released were the improving CAD (hence lessened the odds that BI will raise rate again), the improving IDR, Bank of Japan’s continued stimulus, and Fed’s Janet Yellen’s statement that the tapering policy will continue on.

Chatib Basri said that GDP growth between 5.5%-5.8% is more realistic at the moment. Slower growth, according to Basri, will help trim CAD to 2.0%-2.5% of GDP. Basri’s target was below the APBN’s expectation that growth will be around 6.0%.

BBRM, SMGR, TBIG, & HERO

IDX’s newcomer BBRM booked an 8.66% increase in revenue throughout 2013, but its net profit tumbled to $5,497k from $7,007k or fell 21.55%.

SMGR’s revenue jumped 25.02% in 2013, while its net profit were up 10.79%. Assets grew 15.85% as liability grew less (+6.83%)

Net profit soared at HERO by 121.7%, whilst its liability fell 33.61% and its assets up 47.03%.

TBIG reaped 48.23% increase in net profit as its revenue climbed 56.84%.

Technically Speaking...

JCI retreated from its recent peak at 4,665, just above 4,650 resistance but ended the day at 4,623.57. 

Recent peak-turned-support at 4,610 will remain as the nearest support line for JCI, whereas the 200-day EMA at 4,440 will be the subsequent support area. Nearer support will be at 4,550 as this was the congestion area before the index rallied.

Nearest resistance is seen at around 4,650, Friday’s high. Meanwhile, 4,791 will be the next hurdle to crack should 4,650 gives way.

Volume and MACD continued to tick down, capping the upside potential at the moment. For now, the outlook is biased to the downside as recent gains spells a near-term correction.

Day Ahead

There’s still no fresh key catalysts expected in the coming week. Hence, the JCI is likely to continue to build up upon the success of the break of 4,610 resistance on the back of more FY2013 earnings releases. The Dow’s advance should lend a helping hand for pushing the index again upwards this Tuesday.

Click here to download the full update (PDF)

Morning Dew - 24 February 2014

Breaking the Barrier

JCI broke the 4,610 key resistance and the index subsequently surged higher to end the week on a firm footing at 4,646. The break set up a good prospect for the coming week.

Some positive catalysts recently released were the improving CAD (hence lessened the odds that BI will raise rate again), the improving IDR, Bank of Japan’s continued stimulus, and Fed’s Janet Yellen’s statement that the tapering policy will continue on.

USDIDR fell from 11,850 to 11,772 per USD.

Proponent of Tapering

Richard Fisher, the Dallas Fed President said that it’s hard to argue that further expansion of central bank balance sheet has had “much efficacy.” That is why, he said added, that he has been a strong proponent of Fed’s tapering of stimulus and that he would continue to advocate such move.

US existing home sales fell 5.1% to 4.62 million (yoy) in January, worse than the expected decline to 4.67 million. Markets however, have dismissed less impressive data and blame weather as the culprit.

Technically Speaking...

JCI finally broke through its resistance at 4,610 and went to as high as 4,650 to end the week on a firm footing.

Recent peak-turned-support at 4,510 will remain as the nearest support line for JCI, whereas the 200-day EMA at 4,440 will be the subsequent support area. Nearer support will be at 4,550 as this was the congestion area before the index rallied.

Nearest resistance is seen at around 4,650, Friday’s high. Meanwhile, 4,791 will be the next hurdle to crack should 4,650 gives way.

Volume slipped a bit while MACD continued to push up, maintaining the upside potential at the moment. For now, the outlook is biased to the upside although recent gains could spell a near-term correction.

Week Ahead

There’s still no key catalysts expected in the coming week. Hence, the JCI is likely to continue to build up upon the success of the break of 4,610 resistance on the back of more FY2013 earnings releases. As the Dow gained fell on Friday, the JCI is prone to correction next Monday.

Click here to download the full update (PDF)

Morning Dew - 21 February 2014

Still on Track

JCI is on its track to hit 4,600 as the index continued to grind higher to hit the intraday high at 4598.

Some positive catalysts recently released were the improving CAD (hence lessened the odds that BI will raise rate again), the improving IDR, Bank of Japan’s continued stimulus, and Fed’s Janet Yellen’s statement that the tapering policy will continue on.

US consumer inflation data showed inflation was up 1.6% in January (yoy), core inflation was up 1.6% (yoy) as well. Jobless claims declined to 336k from 339k.

USDIDR fell from 11,850 to 11,772 per USD.

JSMR & SMBR

The toll road operator JSMR reported its net profit falling 16.59% in 2013, despite the revenue went up 13.50%. Assets and liability gained 14.6% and 16.93%, respectively. Rising various expenses and finance charges were behind the declining profit as revenues cannot keep up.

SMBR’s net profit inched 4.58% higher in 2013 while its revenue advanced 6.46%. Assets jumped 126.22% but liability almost unchanged throughout 2013. SMBR went public just last year.

Technically Speaking...

JCI continued to struggle to break its resistance area around 4,610 as the Thursday’s peak hit 4,598.

Recent peak-turned-support at 4,510 will be nearest support line for JCI, whereas the 200-day EMA at 4,440 will be the subsequent support area. 

Nearest resistance is seen at around 4,610 while 4,791 will be the next hurdle to crack should 4,610 gives way.

Volume was up while MACD continued to push up, maintaining the upside potential at the moment. For now, the outlook is biased to the upside although recent gains could spell a near-term correction.

Day Ahead

There’s still no key catalysts expected this Friday. From the US, only existing home sales will be released, but the data is hardly a market-mover. Hence, the JCI is likely to continue to creep up on the back of FY2013 earnings releases. As the Dow gained overnight, the JCI is biased to the upside as well.

Click here to download the full update (PDF)

Morning Dew - 20 February 2014

On Track

JCI is on its track to hit 4,600 as the index finished up 0.8% to set the intraday high at 4,592. 

Some positive catalysts recently released were the improving CAD (hence lessened the odds that BI will raise rate again), the improving IDR, Bank of Japan’s continued stimulus, and Fed’s Janet Yellen’s statement that the tapering policy will continue on.

The market gave muted response to US producer inflation data released on Wednesday. DJIA ended down again as traders booked profit.

USDIDR inched higher from 11,826 to 11,850 per USD.

BBNI & BNII

BBNI’s net profit was up 28.51% in 2013, as its net income rose 23.28%. Assets and liabilities were up by 16.01% and 16.98%, respectively.  For 2014, the bank aims to see loan growth around 14-17%, LDR is aimed around 84-85%, up from 85.3% achieved in 2013.

BNII recorded a jump of 29.66% in net profit throughout 2013, even with its net interest income only increased by 9.17%. The bank’s assets grew 21.4% while its liabilities were up 20.77%.

Technically Speaking...

JCI is closing in to its resistance area around 4,610 as the Wednesday’s peak hit 4,592.

Recent peak-turned-support at 4,510 will be nearest support line for JCI, whereas the 200-day EMA at 4,440 will be the subsequent support area. 

Nearest resistance is seen at around 4,610 while 4,791 will be the next hurdle to crack should 4,610 gives way.

Volume was up while MACD continued to push up, maintaining the upside potential at the moment. For now, the outlook is biased to the upside although Wednesday’s firm gains could spell a near-term correction.

Day Ahead

Nothing new can lead to another doldrums this Thursday, especially after a firm push on Wednesday. Another Dow’s fall on Wednesday may actually lead to a correction. The earnings reports flow will continue while in the US the consumer inflation data is set for release.

Click here to download the full update (PDF)

Morning Dew - 19 February 2014

BOJ Stimulus

JCI seesaw between gains and losses before finishing the Tuesday’s session with tiny gains of 0.02%. IDX30 and LQ45 indexes ended lower, however.

Following up CAD’s data which improved significantly, BI is now expected to be less unlikely to raise rate. Election is closing in, and it could be a game changer for JCI this year.

In Japan, Bank of Japan’s move to extend its special loan programs to help stimulate the economy led an over 3% gains in Nikkei225 index. 

USDIDR bounced off low from 11,716 to 11,826 per USD.

BTPN & BNGA

BTPN booked a 7.69% increase in net profit in 2013 with its net interest income grew 16.10% during the period. Assets and liabilities were up 17.9% and 16.36%, respectively.

Meanwhile, BNGA reported a slight increase in net profit of 1.09% as its net interest income only grew 4.24% in 2013. Assets and liabilities increased 10.87% and 10.43%, respectively.

Technically Speaking...

JCI struggled to hold onto its recent gains and managed to gained slightly by the end of Tuesday’s session. 

Recent peak-turned-support at 4,510 will be nearest support line for JCI, whereas the 200-day EMA at 4,440 will be the subsequent support area. 

Nearest resistance is seen at around 4,610 while 4,791 will be the next hurdle to crack.

Volume was up while MACD continued to push up, maintaining the upside potential at the moment. Near-term, the outlook is biased to the upside although exhaustion is spotted.

CSAP is filled and the position is now open.

Day Ahead

Bank of Japan’s move managed to buoy the regionals as the JCI dodged the red. With lack of fresh catalysts, the JCI is expected to run into a doldrums this Wednesday. Still, recent CAD improvement will keep the upside bias intact. As usual, the earnings flow will put individual stocks into focus as well. The Dow’s decline may limit the upside.

Click here to download the full update (PDF)

Morning Dew - 18 February 2014

CAD Improved 

Bank Indonesia reported on Friday that current account deficit had eased to USD4bn  (1.98% of GDP) from its record high of USD9.9bn (4.4% of GDP) during 2Q13. Improved surplus in non-oil & gas sector and trimmed deficit in the oil & gas sector were behind the better-than-expected data.

Reiterating that BI’s stance over interest rate is more dependent on CAD and IDR, the latest data should keep the BI’s hands off the rate rise for now. If the condition holds, we may be done with rate hike this year.

USDIDR fell further to 11,716 from 11,886 per USD.

LPPF, PTPP, TINS

LPPF posted strong results in 2013. Net profit jumped 49.20% as revenues up 20.25%. Liabilities were significantly down by 23.51% whereas assets inched 0.24% higher.

PTPP’s net profit also soared by 35.86% on the back of 45.63% growth in revenues. Assets grew 45.2% while liabilities were up 51.28%.

TINS’s revenues fell 20.52% but its net profit still up by 19.35%. Liability soared 90.26% while assets only grew 28.6%.

Technically Speaking...

JCI cleared its resistance at 4,510 and finished the day higher.

The 200-day EMA at 4,440 will be the interim support area for now, followed by recent lows at 4,380 and 4,286. Next big support comes at 4,161, followed by 4,109 and 3,837.

Nearest resistance is seen at around 4,610 while 4,791 will be the next hurdle to crack.

Volume was up while MACD continued to push up, maintaining the upside potential at the moment. Near-term, the outlook is biased to the upside.

CSAP is added to the reco list. Entry is set between 190-200 with target set at 250 and risk set below 180.

Day Ahead

Post-CAD data, the coming sessions may be mild with positive bias and considering the Indonesian stocks are still in the earnings season mode, we are probably going to see stocks move individually, depending on which ones reporting better than expected (or worse than expected).

Click here to download the full update (PDF)

Morning Dew - 17 February 2014

Back to Earnings

ADMF reported a 20.34% jump in net profit as its revenues in 2013 were up 19.42%. BDMN’s net profit was up slightly by 1.02% while its revenues grew 4.71%. Two more companies reported their performance for 2013: WOMF reported a decline of revenues by 1.44% while net profit soared 769.89%. 

Government-owned WSKT reported that its net profit were up by 44.85%. Its EPS however, were up 0.16% as revenues grew 9.97%. 

USDIDR fell further to 12,073 from 12,115 per USD as BI held rates steady at 7.5%.

Sentiment Steady

US University of Michigan Confidence Index stayed  at 81.2 in February, while industrial production fell 0.3% in January after a 0.3% increase in December.  Capacity utilization however, slipped to 78.5% from 78.95.

Next week data coming out of US will be inflation data (PPI and CPI), housing data, and Fed’s minutes of the recent FOMC meeting. Hardly any of them could be the potential market mover.

Technically Speaking...

JCI continued its attempt to clear the resistance zone around 4,480-4,510, but  hardly successful so far. 

The 200-day EMA at 4,420-4,430 will be the interim support area for now, followed by recent lows at 4,320 and 4,286. Next big support comes at 4,161, followed by 4,109 and 3,837.

Nearest resistance is seen at around 4,480-4,510. Once 4,510 is cleared, 4,592-4,610 will be the next hurdle to crack.

Volume was down a bit while MACD continued to push up, maintaining the upside potential at the moment. Near-term, the outlook is biased to the upside.

RALS hit its target price at 1,400 and the reco ended with 10.24% gains.

Week Ahead

Lack of key data next week suggests that the coming week may be mild and considering the Indonesian stocks are still in the earnings season mode, we are probably going to see stocks move individually, depending on which ones reporting better than expected (or worse than expected).

Click here to download the full update (PDF)

Morning Dew - 14 February 2014

BI Held Rate Steady

Bank Indonesia held the interest rates steady at 7.5%, as expected. The central bank is seen holding rates for now as it has lack of reasons to raise rates again.  

Post-BI decision and after Janet Yellen delivered her first speech as the Fed boss, the market will tend to be moving sideways in a wider range.

On the other hand, investors are likely to wait for corporate earnings report, scheduled for release this month.

USDIDR fell further to 12,073 from 12,115 per USD as BI held rates steady at 7.5%.

Jobless Up, Sales Down

US Jobless claims ticked up during the recent week to 339k from 331k a week earlier. The reading was worse than the expected of 330k.

US Retail sales fell 0.3% in January after a 0.3% gains in December. The result was also disappointing as the consensus stood at 0.2% gains. Excluding autos, sales stood still, but excluding auto and gas the sales were down by 0.2%.

Technically Speaking ...

JCI continued its attempt to clear the resistance zone around 4,480-4,510, but  hardly successful so far. 

The 200-day EMA at 4,420-4,430 will be the interim support area for now, followed by recent lows at 4,320 and 4,286. Next big support comes at 4,161, followed by 4,109 and 3,837.

Nearest resistance is seen at around 4,480-4,510. Once 4,510 is cleared, 4,592-4,610 will be the next hurdle to crack.

Both volume and MACD were up and this looks promising at the moment, especially that the index has managed to hold on its gains above the EMA band. Near-term, the outlook is biased to the upside.

LPKR’s entry price has been filled. The reco is now an open trade.

Day Ahead

As BI delivered no rate surprise on Thursday and that the US and Europe had a rather mixed session, the week may end in a neutral tone. JCI is seen neutral again on Friday.

Click here to download the full update (PDF)

Morning Dew - 13 February 2014

Debt Limit Off

Yellen’s speech put off worries of aggressive tapering by the Fed. This builds positive tone for the stock market, including for JCI. With no major shifts in the Fed’s monetary policy, the domestic theme will center on the earnings reports.

US House of Representatives agreed to suspend the debt limit until March 2015. Without such move, the US’s ability to borrow may not last beyond Feb 27th.  In the past, similar attempts to prolong the borrowing ability tend to involve eleventh hour decisions which created market uncertainties. No suspense this time around.

USDIDR dipped to 12,115 per USD from 12,174 per USD. While the greenback takes a step back, the USDIDR remains vulnerable.

China’s Trade

China’s trade surplus widened to $31.9b, as exports rose 10.6% (yoy) while imports gained 10%. Both were better-than-expected and showed that China is gradually back on its feet again

Post-Yellen’s remarks the market will await the retail sales data coming out of US. Sales in January is expected to stay the same as December sales, slowing from 0.2% gains seen in prior month. Jobless claims is also due and expected to change slightly from 331k to 330k.

Technically Speaking...

JCI continued its attempt to clear the resistance zone around 4,480-4,510, but still the advance stayed capped so far.

The 200-day EMA at 4,420-4,430 will be the interim support area for now, followed by recent lows at 4,320 and 4,286. Next big support comes at 4,161, followed by 4,109 and 3,837.

Nearest resistance is seen at around 4,480-4,510. Once 4,510 is cleared, 4,592-4,610 will be the next hurdle to crack.

Both volume and MACD were up and this looks promising at the moment, especially that the index has managed to hold on its gains above the EMA band. Near-term, the outlook is biased to the upside.

LPKR has been added to the reco list. The reco aims to enter between 900-940, with stop set below 850 and target set at 1,100.

Day Ahead

As most, if not all, key market catalysts have been out, the JCI will be more influenced by earnings reports for FY2013. US session on Wednesday saw the market taking a breather, so Thursday for JCI is likely to be neutral with positive bias.

Click here to download the full update (PDF)

Morning Dew - 12 February 2014

Continuing the Legacy

Indonesian stocks went back up on Tuesday as the market awaits the first speech from Janet Yellen, the new Fed chairwoman. 

In her speech, Yellen said indicated that the Fed under her will continue the policy of the Fed previously led by Ben Bernanke. The policy of tapering off the stimulus in “measured steps” will be maintained. Only a “notable change in the outlook”  for the economy can slow the pace of tapering.

Financial market turmoil does not pose a major risk to the US economy outlook while asset purchases aren’t on a “pre-set course”.  As for labor market, the recovery is far from complete, she said.

Unemployment rate recently fell to 6.6%, while the Fed previously stated that the rate is likely to stay near zero until “well past the time” unemployment falls below 6.5%.

Not The Only One

But jobless rate is not the only one to determine policy action as it is not an adequate gauge of labor-market health. The Fed would be looking at a broad range of data, including unemployment, job creation and many other indicators.

On job creation, US nonfarm payrolls itself showed less jobs were added to the economy in January.

Yellen’s remarks were largely matching the expectations. In the end, Yellen is seen leading the Fed to stay on its policy course set during Bernanke’s era.

Technically Speaking...

JCI is closing in to its resistance area as it settled the day at 4,470 after having peaked at 4,475 during Tuesday’s session.

The 200-day EMA at 4,420-4,430 will be the interim support area for now, followed by recent lows at 4,320 and 4,286. Next big support comes at 4,161, followed by 4,109 and 3,837.

Nearest resistance is seen at around 4,480-4,510. Once 4,510 is cleared, 4,592-4,610 will be the next hurdle to crack.

MACD is rising but volume dipped slightly. The index now back above the EMA band, but the continued inability to clear the 4,510 resistance could erode the index’s near-term positive outlook. 

Day Ahead

Yellen’s speech drove the US stocks up with the DJIA gained 1.22% and S&P rose 1.11%.  This suggests that the Wednesday session in Asia is likely to be positive than negative. Meanwhile, domestic stocks will continue to be influenced by the earnings season already started.

Click here to download the full update (PDF)

Morning Dew - 10 February 2014

Weather Factor

JCI added more gains on Friday as the index tracked the US stocks rise on Thursday. Investors were anticipating the release of US nonfarm payrolls during the US trading hours which came out less than expected.

While the market consensus was at 180k, the payrolls number came in at 113k, better than December’s 75k but came short of expectation. Still, the poor reading was said to have been caused by the poor weather during the period and that the Federal Reserve is expected to be unaffected by the result. Unemployment rate however, improved from 6.7% to 6.6%.

Elsewhere, USDIDR bounced to IDR12,176 per US$ from IDR12,159 per US$. 

Awaiting IPO

Several companies are currently await to be listed on the IDX.

Intermedia Capital, a part of Bakrie Group’s VIVA; Graha Layar Prima (Blitzmegaplex); Wika Beton (worked on by Bahana, Mandiri, Danareksa, and Sucorinvest); Bali Towerindo Sentra(appointed RHB OSK); Link Net  and Bumi Raya Investindo (part of AISA) are the names aiming for listings in the short-term.

Technically Speaking...

JCI popped above the EMA-band to end Friday’s session at 4,466, up 0.9%.

Prior high at 4,432-4,428 will be the interim support area for now, followed by recent lows at 4,320 and 4,286. Next big support comes at 4,161, followed by 4,109 and 3,837.

Nearest resistance is seen at around 4,480-4,510. Once 4,510 is cleared, 4,592-4,610 will be the next hurdle to crack.

MACD is rising and volume has steadily on the rise as well. With the index now back above the EMA band, the near-term outlook is positive. Monday is expected to be another up day for JCI.

Week Ahead

So far, the improving jobless claims is seen as positive for JCI on Friday. The data somehow triggered a broad-based rally both among European and American stocks. Asian stocks may be on track for similar gains, including JCI.

Click here to download the full update (PDF)

Morning Dew - 7 February 2014

Eyes on Payrolls

As we enter February, earnings coming out of JCI constituents are going to steal the investors’ attention for about a month. External factors are going to be pushed aside on the sideline for a while.

On the macro side, the next big thing is the release of US nonfarm payrolls this Friday. Payrolls are seen up by 175k in January, better than the prior 74k increase in December. Unemployment rate is seen steady at 6.7% during the same period.

Better-than-expected payrolls data will bring some relief over the concern that the US economy is at risk by the Fed’s tapering policy. Job market has been one of the key determinants of Fed’s policy lately and may continue to play this role until the Fed wipes out the remaining stimulus worth $65bn.

Elsewhere, USDIDR fell further to IDR12,159 per US$ from IDR12,172 per US$. 

Jobless Claims Fell

Jobless claims fell 20k in the US in the week ended Feb 1st 2014. The 331k reading was better than the consensus 335k and was a relief for investors which saw a less-than-expected private hiring number in January.

On another front, the US trade deficit has widened 12% in December to $38.7b, worse than the expected $36b. Exports were down while imports were slightly higher as consumer demand rose.

Productivity however, was up 3.2% in 4Q13, slower than 3.6% gain seen in 3Q13.

Technically Speaking...

JCI turned higher on Thursday as the index ended up 0.92% at 4,424.

Recent lows at 4,320 and 4,286 be the nearest key supports while the next big support comes at 4,161, followed by 4,109 and 3,837.

JCI continues to struggle higher as nearest resistance is seen at 4,432, followed by another one around 4,480-4,510.

MACD has turned higher although it remains negative at the moment while RSI has started to stop its slide. Volume has curled higher. This suggests that the recent bounce may continue for some more.

Day Ahead

So far, the improving jobless claims is seen as positive for JCI on Friday. The data somehow triggered a broad-based rally both among European and American stocks. Asian stocks may be on track for similar gains, including JCI.

Click here to download the full update (PDF)

Morning Dew - 6 February 2014

Slowing Down

Indonesia GDP growth slowed in 2013 from 6.2% in 2012 and 6.5% in 2011 to 5.78% in 2013. Excluding oil and gas sector, growth was at 6.25%.

Depreciating rupiah and higher interest rate policy were some key factors behind the 2013 economic slowdown. Exodus of foreign funds in 2013 on the other hand, was triggered by the US Federal Reserve’s plan to taper the stimulus. The tapering, was seen as a prelude to interest rate hike in the US, and this prompted foreign funds to retrieve their investments in Indonesia in exchange for US$-based investments/assets. This did not just happen in Indonesia, but the flight to quality has been seen around the world as well, especially among emerging economies.

USDIDR fell to IDR12,172 per US$ from IDR12,248 per US$. 

Private Sector Hiring Fell

US ADP Employment survey showed that private sector hiring fell in January from 227k to 175k, worse than the expected fall of 185k.

Another key US data was the ISM for non-manufacturing sector which was up in January. The reading was 54.0, better-than-the-expected 53.7, and an improvement from December’s number of 53.0.

The ADP number is considered as a leading indicator to US nonfarm payrolls data which is scheduled for release this Friday.

Technically Speaking...

The fall took a pause on Wednesday as the index ended up 0.7% at 4,384.

Recent low at 4,286 will be the nearest key support line while the next big support comes at 4,161, followed by 4,109 and 3,837.

Continuous pressure has eroded the upside potential of JCI. Nearest resistance is seen at 4,432, followed by another one around 4,480-4,510.

MACD has turned negative while RSI has started to slide. Volume has been on the decline. This suggests that the current flight could be corrective.

RALS has been filled at 1,270.

Day Ahead

Less-than-expected private payrolls in the US has triggered the decline of Dow. This could lead to another slide in JCI on Thursday. The next big thing is the payrolls data set for release on Friday. From the domestic side, recent report of slowing economic growth is also seen as negative for market sentiment.

Click here to download the full update (PDF)

Morning Dew - 5 February 2014

Taking A Breather

JCI continued its decline on Tuesday, tracking the decline in the US and Europe. In addition, the stubbornly high inflation data has raised concern that Bank Indonesia may raise rates again.

From the global front, the woes coming out of the emerging economies continue to be another threat to reckon with along with the market’s expectation on the Federal Reserve’s policy path. After delivering another $10bn cut in stimulus, the Fed is seen maintaining the pace for the coming meetings until the stimulus is completely removed. If however, the Fed accelerates the pace, the market will be under additional pressure whilst a deceleration will be cheered by investors.

USDIDR was slightly down at IDR12,248 per US$ from IDR12,251 per US$.

Factory Orders Down

US factory goods orders fell 1.5% in December. Despite falling, the reading was better than the consensus which forecast the fall of 1.8%.

From the Fed, Jeffrey Lacker, the Fed Bank of Richmond President said that a decline in global stock markets probably won’t deter the Fed from further trimming bond purchases.

US ADP employment survey is expected to report an additional of 195k new jobs in January in the private sector, down from 238k reported in December.

Technically Speaking...

JCI resumed its decline on Tuesday, settling the day at 4,352.26.

Recent low at 4,286 will be the nearest key support line while the next big support comes at 4,161, followed by 4,109 and 3,837.

Continuous pressure has eroded the upside potential of JCI. Nearest resistance is seen at 4,432, followed by another one around 4,480-4,510.

MACD has fallen sharply and currently flirting with the zero line while RSI stays high near the overbought area but starts to crumble.

RALS has been filled at 1,270.

Day Ahead

Recent slowdown in the manufacturing front both in the US and China have been the negative catalysts for the global stock markets. In addition, rekindled woes from the emerging economies due to the Fed’s tapering campaign have put stocks under pressure. As the Dow bounced on Tuesday, the JCI is also seen rebounding from recent losses along with the regionals.

Click here to download the full update (PDF)

Morning Dew - 4 February 2014

Inflation Gathered Pace

Indonesian inflation stayed high at 8.22% in January (year-on-year). While still lower than the consensus of 8.38% projected by Reuters poll, the pace was more than Bank Indonesia’s target inflation of 3.5%-5.5%. JCI slipped again on the back of the inflation data. The higher-than-expected inflation tends to prompt cautiousness among investors over BI’s stance on interest rates. Prolonged stay above BI’s target inflation range may push the central bank to raise rates again if deemed necessary, especially if USDIDR also stays elevated.

Another source of weakness of JCI this Monday was the decline in US stocks last Friday. Despite tapering tantrum has subsided for now, the risk for another drop among emerging markets’ stocks cannot be ruled out.

The upcoming nonfarm payrolls data set for release next Friday will be closely watched as it is one of the key factors to dictate the pace of Fed’s stimulus tapering.

Trade Improved, So Did PMI

Indonesia booked its best trade surplus for two years as December data showed. Surplus was at US$1.52bn, up from November’s reading of US$776.8 million.

Elsewhere, HSBC Markit Purchasing Managers’ Index (PMI) survey showed that manufacturing activity in Indonesia had improved from 50.9 to 51.0. The number above 50 signals expansion while below 50 signals contraction.

Technically Speaking...

Pressure still mounting on JCI at the start of the new week. The index fell 0.74% to end at 4,386.26 after touching the intraday low at 4,377.54.

Recent low at 4,286 will be the nearest key support line while the next big support comes at 4,161, followed by 4,109 and 3,837.

Continuous pressure has eroded the upside potential of JCI. Nearest resistance is seen at 4,432, followed by another one around 4,480-4,510.

MACD has fallen sharply and currently flirting with the zero line while RSI stays high near the overbought area.

SMRA got filled and the reco is now open while RALS remains pending for entry at 1,250-1,270.

Day Ahead

Although trade surplus improved and PMI showed expansion in manufacturing sector, inflation stays high in January. The fall in IDR as well as the JCI on Monday point at concerns among investors over what Bank Indonesia will do next. Slump around the globe will also make JCI vulnerable on Tuesday.

Click here to download the full update (PDF)

Morning Dew - 3 February 2014

January Effect

JCI ended January with a 3.38% gains. Anyone believes in “January Effect” may start accumulating stocks soon to capitalize on the theory. The question is: will it work? Two years ago, the JCI ended January with a positive finish, but last year the theory got shot down by the Federal Reserve.

While the index was up by the fifth month in a row, the FOMC’s announcement that tapering will start had shot down the January Effect theory into pieces. FOMC tapering will eventually boost up the attractiveness of dollar-based assets, hence the news trigger flights to quality.

This year, Fed’s tapering has started, and the impact of domestic policies such as higher fuel prices as well as mineral ore export ban have been factored in. The risk on holding your faith on January effect will be if the Fed speeds up its tapering process. This however, is pretty much unlikely at the moment.

Payrolls Back In Focus

US nonfarm payrolls are seen adding 180k jobs in January, more than 87k jobs added in prior period. The unemployment rate for the same period is expected to stay at 6.7%.

From the private sector, hiring is seen rising to 195k in January while prior period saw it at 238k.

US trade deficit is expected to widen to $35.8b from $34.3b in December.

US ISM for manufacturing sector is seen down from 57 to 56.4 in January, while the service sector gauge is seen up from 53 to 53.9.

Technically Speaking...

JCI ended the holiday-shortened week flat. The index struggled to hold its recent gains from the rebound off 4,286 low but still ended the week 0.4% lower.

Recent low at 4,286 will be the nearest support line while the next big support comes at 4,161, followed by 4,109 and 3,837.

While fairly limited, upside potential is seen as the index will struggle to break the resistance area around 4,480-4,510.

MACD has fallen sharply and currently flirting with the zero line while RSI stays high near the overbought area.

Added RALS and SMRA to the reco pool.

Week Ahead

Emerging market remains the top pressure point for JCI while other issues at the moment remains neutral. Domestic economic data do not seem to warrant another rate rise from Bank Indonesia at the moment. From overseas, key data will be the US nonfarm payrolls as well as PMI/ISM data from Europe and U.S.

Click here to download the full update (PDF)