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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