Morning Dew - 30 April 2014

In A Standstill

Held hostage by the political uncertainties, stocks were mixed throughout the session with the JCI eventually inched higher by less than a point to 4,819.68.

The Federal Reserve is holding its two-day policy meeting starting on Tuesday. The FOMC is expected to deliver another stimulus cut by $10 million. Domestic market is likely to respond to the FOMC meeting result on Friday as Thursday will be an off-day for the JCI.

US consumer confidence fell to 82.3 in April after 83.9 seen a month earlier, according to the Conference Board. The reading was below the mediam consensus which is at 83.2

Investors are anxiously await how the political uncertainties will be resolved. Jokowi, the PDI-P presidential candidate, is expected to announce his running mate as soon as this week.

USDIDR tumbled to 11,589 from 11,568 on Tuesday.

ADRO, TAXI

ADRO recorded a record quarterly coal production of 13.99 million tonnes (Mt), up 23% YoY, bringing the realized production closer to the company’s guidance of 54Mt-56Mt for 2014. Sales were up 23% to 13.85Mt.

TAXI saw a rise in revenues to Rp182,012 million from Rp157,940 million seen a year earlier. Net profit (ex non-controlling interest) was up to Rp29,258 million from Rp23,893 million. EPS was higher at Rp13.61 compared to Rp12.39 seen last year.

Technicallly Speaking...

JCI was in a standstill as the index finished at 4,819.68, barely moved from Monday’s closing price.

Developing on the daily chart is the head-and-shoulders pattern with the neckline projected around 4,750 or just above the 50-day EMA. The left shoulder is at 4,903, the head at 4,933 and 4,916 is so far the right shoulder. Volume shows decreasing pattern from the left shoulder to the right one, adding credibility to the pattern.

JCI needs to break through the nearest resistance seen at 4,933 to negate the H&S pattern. Higher, subsequent resistances lie at 5,000 which is the psychological resistance and later the projection target at 5,063.

MACD declined, moving away from the zero line while the RSI curve continued to turn lower as the odds for deeper setback looms large.

Day Ahead

It’s clear that the market awaits how the political situation will develop ahead of the presidential election in July. FDI news has hammered sentiment somehow, but the fallout has been somewhat anticipated from the technical perspective. Earnings reports will flow more intense as we inch closer towards the end of the month.

Click here to download the full update (PDF)

Morning Dew - 29 April 2014

The Woe Factor

Held hostage by the political uncertainties, stocks fell across the board with all sectors ended in red. The JCI fell off to start the week on a wrong footing as it ended Monday’s session at 4,818.76.

Adding up to the woes was the FDI realization in 1Q14 which rose just 9.8% (year-on-year) to Rp72 trillion, much slower than the 25% growth seen in the prior quarter. BI governor Agus Martowardojo on Friday said that the slowdown was still in line with the central bank’s forecast and that the slowdown could be compensated by the robust growth of foreign portfolio investment (FPI).

Investors are anxiously await how the political uncertainties will be resolved. Jokowi, the PDI-P presidential candidate, is expected to announce his running mate as soon as this week.

USDIDR tumbled to 11,568 from 11,601 on Monday.

TLKM, PTBA

TLKM posted an 8.71% increase in revenues to Rp21,250 billion in 1Q14, bringing its net profit ex-minority interests to Rp3,649 billion,  or up 4.95%. The telco giant’s assets grew 1.97% during the period (quarter-to-quarter) while the liabilities fell 5.11% (quarter-to-quarter).

PTBA saw its revenues were up 11.39% to Rp3,093,648 million in 1Q14, which translates to an 8.74% increase in net profit to Rp536,303 million. Assets and liabilities also grew by 4.05% and 22.31%, respectively from prior quarter.

Technically Speaking...

JCI fell 1.61% to start the week on the wrong foot. The index finished at 4,818.76, much lower than last Friday’s closing price.

Developing on the daily chart is the head-and-shoulders pattern with the neckline projected around 4,750 or just above the 50-day EMA. The left shoulder is at 4,903, the head at 4,933 and 4,916 is so far the right shoulder. Volume shows decreasing pattern from the left shoulder to the right one, adding credibility to the pattern.

JCI needs to break through the nearest resistance seen at 4,933 to negate the H&S pattern. Higher, subsequent resistances lie at 5,000 which is the psychological resistance and later the projection target at 5,063.

MACD declined, moving away from the zero line while the RSI curve continued to turn lower as the odds for deeper setback looms large.

Day Ahead

It’s clear that the market awaits how the political situation will develop ahead of the presidential election in July. FDI news has hammered sentiment somehow, but the fallout has been somewhat anticipated from the technical perspective. Earnings reports will flow more intense as we inch closer towards the end of the month.

Click here to download the full update (PDF)

Morning Dew - 28 April 2014

Listless

• JCI continues to hover around 4,900 handle as the market awaits new catalysts, both on the domestic front and the overseas ones.
• US Composite PMI was down to 54.9 in April as preliminary figure shows. Previously, the index was at 55.3 in March. On the service side, PMI also ticked down from 55.3 to 54.2 in April. Market had expected it to inch higher to 55.5. Confidence improved in April as suggested by the U of Michigan’s data. The index stood at 84.1, more than the consensus figure of 83.0 as well as the prior number of 55.3.
• USDIDR inched lower to 11,601 from 11,608 seen on Thursday. The currency is still overshadowed by the statement from BI Governor a while back about the possibility that CAD will be back above 2% of GDP.

HERO, HOME

• HERO posted a 16% increase in net revenue in 1Q14 to Rp3,132 billion from Rp2,695 billion, but the net profit for the period was unchanged at Rp55 billion. EPS fell to Rp13 per share from Rp16 per share, reflecting the impact of new shares issuance.
• HOME’s 1Q14 revenues were up to Rp11,592 million from Rp10,055 million a year earlier. Losses for the year worsened to Rp2,136 million from Rp2,053 million seen last year. EPS fell further to -Rp3.77 per share from -Rp0.91 per share

Technically Speaking...

• JCI continued to flirt around the 4,933 resistance level as consolidation takes the index nowhere.
• While the star pattern has failed to be confirmed so far, the next one developing on the daily chart is the head-and-shoulders pattern with the neckline projected around 4,750 or just above the 50-day EMA. The left shoulder is at 4,903, the head at 4,933 and 4,916 is so far the right shoulder. Volume shows decreasing pattern from the left shoulder to the right one, adding credibility to the pattern.
• JCI needs to break through the nearest resistance seen at 4,933 to negate the H&S pattern. Higher, subsequent resistances lie at 5,000 which is the psychological resistance and later the projection target at 5,063.
• MACD declined, moving away from the zero line while the RSI curve turned lower as sideways movements tend to pull RSI down.

Week Ahead

It’s clear that the market awaits how the political situation will develop ahead of the presidential election in July. Lack of fresh catalysts from abroad and domestic sides have brought market focus towards the flow of 1Q14 financial reporting. The earnings reports will flow more intense as we inch closer towards the end of the month.

Click here to download the full update (PDF)

Morning Dew - 25 April 2014

Political Hangover

JCI continues to float around 4,900 handle as the market awaits new developments on the political front to reduce the current political uncertainties.

US durable goods orders gained 2.6% in March, outpacing the consensus gains of 2% and also better than the prior month’s 2.1% increase. Excluding transportation items, durable goods orders were up 2.0%, also beating estimates of 0.6% rise and way above the prior month’s slight increase of 0.1%. Initial jobless claims ticked up to 329k in the most recent week however, worse than the consensus take of 315k and much higher than prior week’s 305k claims.

USDIDR continues to climb to 11,608 from 11,590 seen on Wednesday as the BI Governor’s recent comment brought concerns over the CAD issue which is said to have stood above 2% of GDP again in 1Q14.

BBRI, UNVR

BBRI posted a strong 28.06% gains in its net interest income to Rp17,099,293 million in 1Q14, bringing its net profit to Rp5,934,670 million, or up 16.71% from the same quarter last year. Assets fell 1.67% while liabilities were down by 1.87%.

UNVR’s net profit slipped 4.96% to Rp1,360,981 million in 1Q14, even as its revenues were up 15.17% to Rp8,725,116 million. Assets grew 7.24% to Rp14,314,180 million, while liabilities were down by 4.34% to Rp8,698,529 million.

Technically Speaking...

JCI continued to flirt around the 4,933 resistance level as consolidation takes the index nowhere.

While the star pattern has failed to be confirmed so far, the next one developing on the daily chart is the head-and-shoulders pattern with the neckline projected around 4,750 or just above the 50-day EMA. The left shoulder is at 4,903, the head at 4,933 and 4,916 is so far the right shoulder. Volume shows decreasing pattern from the left shoulder to the right one, adding credibility to the pattern.

JCI needs to break through the nearest resistance seen at 4,933 to negate the H&S pattern. Higher, subsequent resistances lie at 5,000 which is the psychological resistance and later the projection target at 5,063.

Neckline at around 4,750 is the nearest support, while key support lies at 4,661. 

MACD declined, moving away from the zero line while the RSI curve turned flat, but heading towards the neutral area around 50%.

Day Ahead

Doldrums are expected to continue as politics remain the key catalyst in the near future for JCI. Meanwhile, 1Q14 reports are seen flowing as we approach the end of the month. US stocks fell overnight, but most likely a temporary setback after a string of consecutive gains.

Click here to download the full update (PDF)

Morning Dew - 24 April 2014

CAD Disappointment

JCI slipped below 4,900 as the index continues to struggle to find incentives to move higher – or to move lower. 

As the presidential election nears, the political dynamics are expected to gain intensity and are likely to swing the market mood.

China’s manufacturing sector continued to contract in April as preliminary PMI data showed that the index only inched higher to 48.3 from 48.0 seen in March. This will be the fourth time in a row that the index stands below the 50 mark, which separates between contraction and expansion.

USDIDR continues to climb to 11,590 from 11,486 seen on Tuesday following the comment from BI’s Governor Agus Martowardojo. The Governor said that current account deficit (CAD) may have exceeded 2% of GDP again in 1Q14 after it stood at 1.98% of GDP in 4Q13.

BTEL, ELSA

BTEL recorded a net profit of IDR210,732 million, reversing a IDR97,473 million of losses in 1Q14. Revenues fell to IDR390,500 million from IDR582,497 million, however. Strong gains on forex were the key behind the net profit.

Despite a fall in revenues to IDR918,296 million in 1Q14, ELSA booked a net profit of IDR54,162 million, up 56% from the same quarter a year earlier.  Assets and liabilities fell 2.35% and 7.42%, respectively.

Technically Speaking...

JCI continued to flirt around the 4,933 resistance level as consolidation takes the index nowhere.

While the star pattern has failed to be confirmed so far, the next one developing on the daily chart is the head-and-shoulders pattern with the neckline projected around 4,750 or just above the 50-day EMA. The left shoulder is at 4,903, the head at 4,933 and 4,916 is so far the right shoulder. Volume shows decreasing pattern from the left shoulder to the right one, adding credibility to the pattern.

JCI needs to break through the nearest resistance seen at 4,933 to negate the H&S pattern. Higher, subsequent resistances lie at 5,000 which is the psychological resistance and later the projection target at 5,063.

Neckline at around 4,750 is the nearest support, while key support lies at 4,661. 

MACD declined, moving away from the zero line whilethe RSI curve has fallen as well, heading towards the neutral area around 50%.

Day Ahead

Doldrums are expected to continue as politics remain the key catalyst in the near future for JCI. Meanwhile, 1Q14 reports are seen flowing as we approach the end of the month. US stocks fell overnight, but most likely a temporary setback after a string of consecutive gains.

Click here to download the full update (PDF)

Morning Dew - 21 April 2014

Another Earnings Season

JCI ended the week up by 0.49%, closing in to the 4,900 mark.

Yellen’s statement has provided support for global stocks, including the domestic stocks.

As the presidential election nears, the political dynamics are expected to gain intensity and are likely to swing the market mood.

Just as the financial reporting of 2013 performance has just passed, the financial updates for 1Q14 are starting to pour in in the coming week. AALI and BDMN have reported their results and more are expected to report as well.

From the US, initial jobless claims were up by 2k in the most recent week to 304k, but better than the expected claims of 315k. Meanwhile, Philly Fed Index was reportedly up from 9.0 to 16.6, exceeding expectation of a rise to 10.0.

USDIDR fell on Thursday to 11,418 from 11,438.

AALI & BDMN

AALI reported a 36.8% jump in revenues in 1Q14 from 1Q13. The jump led to a 122.72% increase in its net profit to IDR764,562 million while its assets and liabilities were up 8.11% and 9.01%, respectively.

BDMN’s net interest income were up 2.73%, but the net profit fell 13% to IDR1,005,303 million in 1Q14 against 1Q13. Assets and liabilities were up slightly by 0.91% and 0.52%.

Technically Speaking...

While the JCI ended the holiday-shortened week just below 4,900, the technical outlook remains uncertain.

Failure to follow-through its recent gains has formed yet another potentially bearish star pattern on the daily JCI chart, a traditionally sign of trouble. 

The nearest resistance is seen at 4,933, the recent intraday high ahead of 5,000 which is the psychological resistance and subsequently the projection target at 5,063.

Key support lies at 4,661 which corresponds to the 50-day EMA curve.

Volume slipped on Thursday, but the MACD continued to climb to above the zero line while the RSI curve has flattened.

Week Ahead

Politics will remain the key catalyst in the week ahead as the political landscape will determine who will win the upcoming presidential election in July. Recent speech by Janet Yellen is expected to continue lending its support but China and Ukraine could limit the upside potential for now. More 1Q14 reports will be out next week, putting emphasis on individual moves instead of general direction.

Click here to download the full update (PDF)

Morning Dew - 17 April 2014

Yellen, Refreshed

In her recent speech, the Fed chair Janet Yellen “refreshed” her take on the US monetary policy, Her recent comment (on March 19th) that the Fed may rise its benchmark interest rate about six months after the tapering process ends had made sparked some selloffs across the global stock markets.

All the market should think about is the gap between the Fed’s goals and actual figures of unemployment and inflation rates. Currently, the unemployment rate is at 6.7%, much higher than the Fed’s estimate for full employment of 5.2 to 5.6%. Inflation rate on the other hand, is now well below the 2% target set by the Fed. In other words, Yellen indirectly replaced the 6.5% scrapped target unemployment rate with 5.2 to 5.6% full employment estimate.

Both American and European stock indexes cheered Yellen’s speech and Asian stocks are most likely be doing the same.

GDP Slowed, Again.

China’s GDP slowed to 7.4% in the first quarter of 2014 vs. a year earlier. While the figure was better than the consensus 7.3%, the growth rate was behind the 7.7% seen in 4Q13. From prior quarter, the GDP grew 1.4%, less than the consensus estimate of 1.5% growth and also slower than prior quarter-to-quarter growth of 1.7% seen in 4Q13.

China’s industrial production  grew 8.7% (YoY) during the first 3 months in 2014, while in March alone production grew 8.8% (YoY).

Technically Speaking...

It’s going to be another make-or-break moment for JCI as the index inched higher on Wednesday, closing in to the key resistance at 4,933. 

Failure to follow-through its recent gains has formed a potentially bearish star pattern on the daily JCI chart, a traditionally sign of trouble. We had exactly the same pattern when the index took a sharp dive from 4,933 last week.

The nearest resistance is seen at 4,933, the recent intraday high ahead of 5,000 which is the psychological resistance and subsequently the projection target at 5,063.

Key support lies at 4,661 which corresponds to the 50-day EMA curve.

Volume slipped on Wednesday, but the MACD continued to return to above the zero line while the RSI curve curled lower again.

Day Ahead

China slowdown sapped JCI’s gains on Wednesday, but Yellen’s speech overnight is likely to boost sentiment this Thursday and lead the JCI back higher. Risk factors remain however, as political uncertainties still abound, along with potential trouble coming out of Ukraine. As Thursday will be the last trading day for JCI this week, investors may be taking a cautious path even amidst Yellen’s positive speech.

Click here to download the full update (PDF)

Morning Dew - 16 April 2014

Stalling

JCI’s advance stalled on Tuesday as lack of catalysts triggered some profit-taking during this holiday-shortened week. Nothing new on political front as well as no fresh news on the economic front.

In corporate level, Bank Mutiara Tbk. (BCIC) released its 2013 financial report which showed 4.36% and 5.68% declines in assets and liabilities, respectively. Net interest income nearly halved to IDR258,028 million from IDR441,785 million, leading to a net loss of IDR1,136,045 million in 2013, a reverse from net profit of IDR145,596 million seen in 2012.

While US stocks bounced off its lows after initial weakness, the tech stocks are expected to remain threatened by concerns over their valuations.

On the geopolitics front, a renewed concern over Russia-Ukraine spat could be a negative catalyst for the market as Ukraine launched an offensive against militants in eastern Donetsk region. Russian special forces were reportedly identified among the anti-government groups.

Poor Start

Unlike recent IPOs, LRNA fared poorly on its debut. The transportation company’s stock slipped  13.33% to end at IDR780 compared to its initial price of IDR900. About 150 million shares or 42.86% of its equity were offered along with 30 million warrants were issued with 5:1 ratio. Lack of interest on the stock led the company to consider obtaining bank loans to cover the shortage of around IDR90bn. Initially the company aimed to gain IDR225bn from the offering but only get around IDR135bn instead.

Technically Speaking...

JCI struggled to maintain its gains on Tuesday, but only managed to score a razor-thin gains by the end of the day.

Failure to follow-through its recent gains has formed a potentially bearish star pattern on the daily JCI chart, a traditionally sign of trouble. We had exactly the same pattern when the index took a sharp dive from 4,933 last week.

The nearest resistance is seen at 4,930, the recent intraday high ahead of 5,000 which is the psychological resistance and subsequently the projection target at 5,063.

Key support lies at 4,661 which corresponds to the 50-day EMA curve.

Volume slipped on Tuesday, but the MACD continued to return to above the zero line while the RSI curve turned flat.

Day Ahead

Despite recent bounce, JCI is definitely not out of the woods just yet. A potentially bearish star formation on the daily JCI chart is a strong reminder of what had happened when the index took a plunge after it hit 4,933 after last week’s election. Holiday-shortened week, lack of fresh news on both the political and economic front as well as lingering concern over US tech stocks are pointing at a risk of another setback. Rising tension in Ukraine may also heightened the risk.

Click here to download the full update (PDF)

Morning Dew - 15 April 2014

Solid Footing

JCI started the week with a solid footing as it gained 1% on Monday’s session. The index has continued to gradually recapture its lost ground after an indecisive legislative election result last week. 

US retail sales were buoyant in March as the monthly figure showed a 1.1% jump, following a 0.7% gains in February. It was the biggest increase since September 2012 with ten of 13 categories advanced.

In corporate level, Benakat Integra Tbk. (BIPI) released its 2013 financial figures which showed the impact of the acquisition of new mining infrastructure company. Assets jumped from US$479,299k to US$1,339,688k while revenues went up from US$38,059k to US$190,595k and net profit soared from US$929k to US$55,317k. Liabilities however, increased from US$78,122k to US$864,147k.

Second Attempt

Dwi Aneka Jaya Kemasindo will sell 1 billion of new shares or 40% of its stake. The shares will be offered at the range of IDR425-475 per share. This will be its second time the company do the offering after last November when it offered the shares at IDR425-550 per share. The proceeds will be used to purchase machineries (40%) and the rest for working capital. This will raise the production capacity from 36k tons to 76k tons. DAJK is a printing and packaging company.

Technically Speaking...

JCI continued to regain its lost ground and managed to end up by 1% above 4,860.

The nearest resistance is seen at 4,930, the recent intraday high ahead of 5,000 which is the psychological resistance and subsequently the projection target at 5,063.

Key support lies at 4,661 which corresponds to the 50-day EMA curve.

Volume went up on Monday, as the MACD attempted to return to above the zero line and the RSI curve curled back up.

WIKA has met its suggested entry price at 2,140. The reco is now open with stop set below 1,900 and the target price is set at 2,500.

Day Ahead

Upside potentials are maintained based on continuation of Friday’s bounce on Monday. The positive performance from the Dow may also lend support to JCI on Tuesday. Still, with political uncertainties abound, corrective setback remains a threat, especially if the index rises too much and too soon.

Click here to download the full update (PDF)

Morning Dew - 14 April 2014

Back On Track?

Friday’s bounce took the JCI back above 4,800, putting the upside potential intact.

Last week’s election put the JCI’s rally to a screeching halt as the quick count results showed that no single party was able to collect at least 20% of the votes to pass the requirement to propose a presidential candidate. The market is now watching the political landscape closely to see how the parties form coalitions to pass the threshold. 

US stocks have been under pressure as tech stocks plummeted. The fall is a strong reminder of the dot com burst some years ago. This time however, valuation has been cited as the culprit behind the fall.

USDIDR continued to rise to 11,450 from 11,342.

MDIA Debuted, China’s Data

Intermedia Capital Tbk (MDIA) made its debut on Friday as the shares were offered at IDR1,380 per share. The stock ended up almost 10% at the end of its first trading day.

Bappenas (Ministry of National Development Planning) sees 6.7% rise of exports to IDR1,399.7tn in 2014 as global economies are seen improving. Imports are seen up 5.7% to IDR1,075.2tn, bringing the trade surplus to be around $28-29 billion in 2014.

Technically Speaking...

JCI bounced off low and returned above 4,800 on Friday as bargain hunting set in. 

The nearest resistance is seen at 4,839, followed by4,930, the recent intraday high ahead of 5,000 which is the psychological resistance and subsequently the projection target at 5,063.

Key support lies at 4,661 which corresponds to the 50-day EMA curve.

Volume has been slipping however, as the MACD sunk bank below the zero line and the RSI curve curled back down.

WIKA is added to the reco list. It is suggested to entry at 2,100-2,140 while the stop is set below 1,900 and the target price is set at 2,500.

Day Ahead

Upside potentials are maintained based on the Friday’s bounce, but the US stocks weakness may become a drag for the JCI early next week. Politics are seen as the key to the JCI’s next path.

Click here to download the full update (PDF)

Morning Dew - 11 April 2014

Freefalling

JCI nosedived on Thursday in the aftermath of the legislative election which was held on Wednesday.  As no parties were able to clinch a 20% victory over the total votes, uncertainties lie ahead, at least until the next presidential election.

The fall dampened the effect coming out of the FOMC minutes released on Tuesday night which was assumed as a signal that even after the Fed starts its first rate hike the rates will be kept low to accommodate growth in the U.S. 

US tech stocks resumed their freefall as sudden valuation concerns slashed 3.1% off Nasdaq Composite Index while S&P 500 fell 2.1%. Nasdaq Composite now trades at 35x reported earnings while S&P 500 index trades at 17x earnings.

USDIDR jumped to 11,342 from 11,309 on the back of the election result.

BLTZ Debuted, China’s Data

BLTZ made its debut appearance amidst stock market turmoil. The stock managed to end up IDR 400 at IDR3,400, up 13.33%.

China posted US$7.71b trade surplus in March as exports fell 6.6% and imports fell 11.3%. Market had initially forecast 4.8% increase in exports with 3.9% increase imports while surplus had been expected at US$1.80bn

Technically Speaking...

JCI was torn up on Thursday as investors took flight after unfavorable legislative election result. The index finished down 3.16% at 4,765.

The nearest resistance is seen at 4,839, followed by4,930, the recent intraday high ahead of 5,000 which is the psychological resistance and subsequently the projection target at 5,063.

Key support lies at 4,661 which corresponds to the 50-day EMA curve.

Volume has been slipping however, as the MACD sunk bank below the zero line and the RSI curve curled back down.

Day Ahead

Weakness on US stocks overnight may weigh on JCI on Friday as well. Already battered by unsatisfactory election results, JCI is at risk of having another bad day at the end of the week. As long as 4,661 holds however, the door towards 5k will remain open.

Click here to download the full update (PDF)

Morning Dew - 10 April 2014

Not An Easy Win

PDI-P is seen winning the legislative election, based on the latest quick count results (93% counted) from several institutions. Jokowi’s party gained some 19%-plus of total votes while at the second place is Golkar with some 15% of total votes. Prabowo’s Gerindra is at the third place with 11-12% of total votes. PKB and SBY’s Democrats are roughly tied around 9-10% each.

Initially expected to win rather easily, PDI-P may find itself in a need to forge some alliances with other parties. It looks as if the key will be with whom Golkar will ally itself with. With so many possibilities out there, it’s too soon to conclude what the political map will be after the legislative election. The final result of the official count will be on May 9th 2014.

BI Rates, FOMC Minutes

BI held rates steady on Tuesday, as expected. Recent improvements on the economic fundamentals have presented no basis for another rate increase, and this is expected to be the case for some more months ahead, especially as inflation is seen to remain under control.

US FOMC Minutes released overnight brought some relief on investors as the minutes showed that the majority of FOMC saw the need that rates may need to remain low even after they are raised.

Technically Speaking...

JCI ended slightly up on Tuesday as investors anticipated the legislative election scheduled for Wednesday. The index finished up 0.37 points or 0.01%.

The nearest resistance is seen at 4,930, the recent intraday high ahead of 5,000 which is the psychological resistance and subsequently the projection target at 5,063.

Recent multi-top formation at 4,900 will be the interim support, followed by the price gap at 4,769 and the next one at 4,661.

Toppish formation around 4,900 has been broken as volume has regained its strength.

MACD curled higher and managed to resurface above the zero line while the RSI continued to move higher.

Day Ahead

As the dust settles over the Wednesday’s election, the bulls will be boosted by FOMC minutes released overnight but will be capped by the fact that no parties were able to win the election by more than 20% of total votes (so far). This means political bargaining among parties will determine the next political alliances which will shape the upcoming presidential election in July.

Click here to download the full update (PDF)

Morning Dew - 4 April 2014

Slowing Down

JCI’s advance to break the 4,900 resistance was thwarted once more as the index got pushed back to end the day at 4,891. While the road ahead towards 5k remains open, continuous failure to break the roadblock could spell trouble for JCI.

The manufacturing sector slowed in March as PMI from HSBC sunk to 50.1 from 50.5 seen in February. The figure was a seven-month low and just above the borderline between contraction (<50) and expansion (>50).  Chatib Basri, the Indonesia’s Finance Minister said that no government policy is needed to be revised as the slowdown was intended to trim the wide current account deficit (CAD).

USDIDR ticked up to 11,310 from 11,303 on Thursday.

ISM, Jobless Claims, Trade Balance

US ISM for service sector was up to 53.1 in March vs. 51.6 (Feb) vs. 53.5 (consensus).

Initial jobless claims rose to 326k in the final week of March, vs. consensus of 317k as well as exceeding the prior week’s figure of 310k.

US Trade Balance worsened to a deficit of US$42.3b in February from US$39.3b of deficit in January. Market had expected an improvement to a deficit of US$38.5b.

Technically Speaking...

JCI’s climb stalled again as it backed away from 4,900 mark. The index was still up by the end of the day however, as it stood at 4,891.

Recent price gap at 4,769 will be the first line of defense while the next one comes at 4,661.

The nearest resistance is seen at 4,917, ahead of 5,000 which is the psychological resistance and subsequently the projection target at 5,063.

A double-top formation is now forming on the JCI’s daily chart as the index backed off from taking out the peak at 4,903. Convincing breakout of this resistance is needed soon to negate the double-top formation. The valley at 4,661 is seen as the key support to confirm the double-top formation.

Volume ticked down, but MACD continued to move higher and managed to resurface above the zero line towards the positive area. RSI curled lower however.

MLPL reached its target price at 470, so the reco has been closed with 18.99% gains.

Day Ahead

JCI is seen consolidating its gains in the last day of the week as the advance stalled once more just below the 4,900 mark. Still the door to return to 5K handle remains wide open. US nonfarm payrolls data for March is set for release later tonite and the market expected 200k jobs will be added to the US economy, while unemployment rate is seen down to 6.6% from 6.7%.

Click here to download the full update (PDF)

Morning Dew - 3 April 2014

Make-or-Break

Asian Development Bank (ADB) forecast Indonesian GDP growth to slow to 5.7% in 2014 (vs. 5.78% in 2013) but to recover to 6% in 2015. The forecast assumes that the elections this year will be smooth and that the government will continue to support investment climate. Household consumption is seen to remain strong while inflation is seen moderating after hitting the peak of nearly 9% in 2013. CAD reduction will remain a challenge in 2014 and in subsequent years. More infrastructure investment by private sector is urged to improve business climate. By doing so will help reduce in the CAD in the longer-term.

JCI stalled just under the nose of recent peak at 4,903, starting to form a double-top formation which could derail the index from attaining the 5k mark, especially if the key support at 4,661 fails to hold. It’s still too early to conclude however, while at the moment the door towards 5k remains open. It’s going to be a make-or-break soon for JCI.

USDIDR ticked up to 11,303 from 11,271 on Wednesday.

Goods orders, ADP

US factory goods orders increased 1.6% in February, beating the consensus of a 1.2% rise.

ADP Research Institute reported that private hiring came up by 191k in March, slightly beating the consensus figure of 195k. ADP number is considered as a guide to the Friday’s US nonfarm payrolls figures.

Technically Speaking...

JCI’s climb stalled at 4,902.11, just under its 2014 peak at 4,903.50. The index settled 0.08% lower on Wednesday however, ending the day at 4,870.21.

Recent price gap at 4,769 will be the first line of defense while the next one comes at 4,661.

The nearest resistance is seen at 4,917, ahead of 5,000 which is the psychological resistance and subsequently the projection target at 5,063.

A double-top formation is now forming on the JCI’s daily chart as the index backed off from taking out the peak at 4,903. Convincing breakout of this resistance is needed soon to negate the double-top formation. The valley at 4,661 is seen as the key support to confirm the double-top formation.

Volume ticked down, but MACD continued to move higher and managed to resurface above the zero line towards the positive area. RSI also inched higher.

Day Ahead

JCI was mixed on Wednesday as the advance stalled just below the recent peak at 4,903, but the door to return to 5K handle remains wide open. Overnight gains of the DJIA also provides additional support. Election is closing in and could trigger jitters among investors as the day gets closer and closer.

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Morning Dew - 2 April 2014

Timid Inflation

Indonesia’s trade surplus was at US$785.3 million in February as exports increased 0.68% (mtm) to US$14.57bn while imports fell 7.58% (mtm) to US$13.78bn. Crude palm oil and cacao showed higher prices and better demand, supporting the surplus as other commodities continued to see declining prices.

March’s inflation was reportedly at 0.08%, way below February’s pace of 0.26% and also significantly slower than last year’s 0.63%. A drop in prices of food commodities coupled with stronger rupiah attributed to the slowing inflation in March. Year-on-year, March’s inflation slowed to 7.32% vs. 7.75% seen in February. Core inflation was at 0.21% (mtm) & 4.61% (yty).

Both trade data and March inflation sent JCI soaring to 4,873. Timid inflation means that BI will be less likely to raise rates again.

USDIDR fell to 11,271 from 11,404 on Tuesday.

SAME, CSAP

SAME posted a 24.42% increase in revenues to IDR336,511 million in 2013 vs. IDR270,468 in 2012 while net profit soared 100.47% to IDR46,649 million from IDR23,269 million seen in 2012. Assets and liabilities showed an increase of 29.88% and a drop of 9.91%, respectively in 2013. 

CSAP’s net profit jumped 24.03% in 2013 to IDR71,147 million vs. IDR57,365 million as revenues grew 28.23% to IDR6,438,747 million. Assets and liabilities were up by 23.71% and 28.28%, respectively.

Technically Speaking...

JCI is now within spitting distance to its 2014 peak at 4,903.50 as the index soared more than 2% on Tuesday, ending the day at 4,873.93.

Recent price gap at 4,769 will be the first line of defense while the next one comes at 4,661.

The nearest resistance is seen at 4,917, ahead of 5,000 which is the psychological resistance and subsequently the projection target at 5,063.

 

Volume started to kick up, while MACD took a u-turn and re-approaching the zero line towards the positive area. RSI has curled back up as the index jumped.

Steep jump risks gravity, but the door towards 5K remains widely open. Stay tune.

CSAP met its target price at 250, hence the recommendation has ended with 25% gains.

Day Ahead

Strong push higher on Tuesday risks to find gravity on Wednesday, but the door to return to 5K handle remains wide open. Overnight gains of the DJIA also provides additional support. Election is closing in and could trigger jitters among investors as the day gets closer and closer.

Click here to download the full update (PDF)