Morning Dew - 1 October 2014

Weathering the Storm

JCI ended slightly down after initially under pressure. Weak sentiment has weighed on the index recently due to political tempest on the domestic front.

USDIDR continued to climb on Tuesday, reaching 12,212 by the end of the day against 12,120 seen on Monday. The currency has been dogged by myriads of issues lately, both from the domestic and from the global front.

UNIT booked sales worth Rp38.32b in the first six months of 2014, down 14%from the same period a year ago (Rp44.56b). Net profit attributable to owners fell to Rp52.51 million from a year earlier (Rp191.95 million).

INKP and TKIM are set to distribute cash dividend for the FY2013 on November 5th 2014. INKP’s dividend amounted to Rp25 per share while TKIM’s worth Rp10 per share. 

ZBRA

ZBRA shareholders agreed to conduct debt restructuring worth Rp30.07b. The debt-to-equity swap scheme is set to exchange the debt with 15.35% of shares to PT Infinity Wahana, one of the company’s shareholders. The DES scheme will raise Infinity’s holdings to 37.65% from 22.3%.

ZBRA plans to add another 130 units of taxi in Surabaya with estimated cost of Rp18.5b. In October, 30 units will start operation, 50 units in November, and 50 units in December. About 25% of the funding comes from internal while 75% came from non-bank institutions.

Technically Speaking...

There is nothing new under the sun as the JCI slipped slightly after briefly touched the support at the lower 5,100s. It bounced back at the end of the trading session, returning close to Monday close. The outlook remains murky right now, however.

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

On the upside, prior resistance at 5,200 is back, followed by resistances 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 deeper towards the negative area; the RSI has stopped sinking for now, while volume is rising. For now,  we can expect the index to maintain its position within 5,100-5,262 consolidation range with short-term upside bias.

Day Ahead

JCI is still seen struggling within a wide consolidation range of 5,100-5,262. Lack of fresh catalysts may put the index back under persistent pressure coming from domestic political storm as well as the continued weakness of IDR on the back of  the strengthening of the greenback as the end of Fed’s era of low interest rates coming to an end soon.

Click here to download the full update (PDF)

Morning Dew - 30 September 2014

Political Storm

JCI finished slightly up after being slammed by political storm on the domestic front. Coupled with lack of fresh catalysts, this condition prompted investors heading for exits.

Dogged by myriads of issues, USDIDR continued to march higher to start the week finishing at 12,120, against Friday’s 12,007.

BORN’s net sales fell 72.61% by March 2014 to US$37.06 million against US$138.61 million seen last year. Net losses also jumped to US$85.28 million against prior losses of US$14.18 million.

Overseas, Hong Kong crisis sent the Hang Seng index plummeting nearly 2% on Monday. Demonstrations by pro-democracy protesters flooded Hong Kong demanding Beijing for free and open elections.

AALI, CNKO

AALI booked 1.14 million ton of CPO production for the first eight months in 2014, up 20% against the same period last year. Sales volume also up 20% and reached 889,978 ton with olein sales volume reaching 137,976 tons. Also, the average selling price by the end of August was up 27.8% from Rp6,735/kg (2013) to Rp8,604/kg.

OCBC was reportedly divested its CNKO shares worth Rp3.77b on September 18th 2014. The number of shares sold was 14,800,000 shares priced at Rp255 per share. Only 9.39% of CNKO is currently owned by OCBC.

Technically Speaking...

Monday saw the JCI slipped again well below the 50-day EMA before it again resurfaced above 5,100 at the end of the trading session. The prompt rebound may save another day for the index, but 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 punctured.

On the upside, prior resistance at 5,200 is back, followed by resistances 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 deeper towards the negative area; the RSI has stopped sinking for now, and the volume remains relatively stable. For now,  we can expect the index to maintain its position within 5,100-5,262 consolidation range.

Note that ADRO has met its entry price, so the reco is now open.

Day Ahead

JCI is still seen struggling within a wide consolidation range of 5,100-5,262. Lack of fresh catalysts may put the index back under persistent pressure coming from domestic political storm as well as the continued weakness of IDR on the back of  the strengthening of the greenback as the end of Fed’s era of low interest rates coming to an end soon.

Click here to download the full update (PDF)

Morning Dew - 29 September 2014

Democracy is Dead

Squeezed by domestic political storm and the tumbling global stock indexes, the JCI nosedived to the lower 5,100s before bouncing back and settled at 5,132.56, still down 1.32%. Among ten sectors, only consumer goods sector dodged the fall.

Foreigners ran for exit as sentiment soured on the parliament’s voting result, which brought the democracy in Indonesia back to the stone age.

Wall Street however, ended the Friday session on a solid footing after a terrible start  last week on the back of speculation that the Fed will raise rates sooner rather than later.

Following the backyard turmoil, USDIDR soared to return above 12k, after previously down to 11,947.

SMRA, BKSW, RIGS

SMRA is planning to expand its land portfolio in Bandung, Serpong, Bekasi and outside Java. Until the end of this year, the company has prepared Rp200b-300b to finance the expansion. SMRA will use the proceeds from recent issuance of bonds worth Rp800b plus Sukuk Ijarah worth Rp300b. Both sources are to be issued this year and will be used to finance the company expansion until next year (90%) and for the company’s working capital (10%).

BKSW aims at lowering its LDR to 95% from the current position of 104.43% by the end of 2014.

RIGS plans to add a new fleet worth US$28 million for transporting coal cargo by the end of this year.

Technically Speaking...

Friday’s tumble took JCI close to breaking the lower-end of its consolidation range at 5,100, but despite it managed to bounce back and settled at 5,132.56, the near-term outlook has turned sour and less promising.

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 punctured.

On the upside, prior resistance at 5,200 is back, followed by resistances 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 has reversed direction away from the zero line, while RSI is now sinking towards the oversold area. Despite all the gloom and doom reflected on the Friday’s rout, we may see a follow-up bounce on Monday, but the best we can expect would be to maintain the index at 5,100-5,262 consolidation range.

Week Ahead

Slammed by political storm as well as tumbling global equity indexes the JCI is not seeing anything positive on the horizon at the moment. We may see the Constitutional Court back in action to defend the direct election at regional stages. For the week ahead, the index is seen struggling to hold on to its consolidation range at 5,100-5,262 but with a downside bias.

Click here to download the full update (PDF)

Morning Dew - 26 September 2014

Ill Omen

JCI managed to steer above 5,200 mark again on Thursday, but the path upside seems to be slippery, considering the big hit on the US equities overnight.

US equities faltered, dragging the European shares down as well. The 200-points plunge of DJIA is expected to echo in Asia this Friday and could drag Asian shares including IDX into the vortex.

U.S. data point at better employment outlook while rising durable goods (ex-transports) investments in equipments in August also suggests that the Fed is on track to raise the rates sooner rather than later, possibly in mid-2015.

From the home front, the political chaos continues to roil the domestic political landscape. As the country is now on the verge of falling back to indirect election on the regional stage, we could see a potential slipup in investors’ confidence following the shock walkout by the Democrat Party last night.

USDIDR slipped again to 11,947 on Thursday from 11,976.

BUMI, BWPT

BUMI was suspended during the Thursday’s trading session after the company delayed the issuance of new shares which supposedly worth US$275 million. Following the bourse’s inquiry over the status of the new stock issuance, BUMI said that as the company now sees positive opportunities to further discuss the matter with creditors, the company has decided to delay the initial plan to issue new shares.

BWPT is planning to conduct rights issue this year with offering price between Rp390-Rp411 per share, a potential of Rp11.1T to be gained from the corporate action. The matter is still to be reviewed and awaiting approval from the OJK.

Technically Speaking...

JCI climbed back above 5,200, but the ground seems shaky as lack of meaningful changes in the technical indicators could mean the recent bounce may hardly last.

As the index managed to clear the 5,200 resistance handle once more, resistance mark, the next support to watch is 5,125 which is the 50-day EMA. Should we broke below this line, more supports are seen at 5,039 and 5,000.

On the upside, resistances are lining up 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 has reversed direction away from the zero line, while RSI is now back at the neutral area again. Volume seems to be steady recently. While all these are somehow good signs for the index, we should remain cautious over the risk of another setback as we approach the upper end of the expected trading range.

Day Ahead

There’s a storm coming, as the short-term outlook seems to be daunting following the sinking of DJIA and European equities overnight alongside the political turmoil on the home front. The bottom line is: we’re not seeing anything positive on the horizon at the moment, hence a slipup towards the bottom end of the consolidation range 5,100-5,250 may be on the cards this Friday.

Click here to download the full update (PDF)

Morning Dew - 25 September 2014

On the Sidelines

JCI slipped again on Wednesday as lack of fresh catalysts led investors to prefer to stand on the sidelines.

Consumer confidence hit a record high of 161.4 points in August, up 3.7 points from a month earlier as optimism mounts on the coming government led by Jokowi. 

Increased confidence in personal finances and consumers’ expectation to purchase household appliances are also behind the rise, according to data from ANZ-Roy Morgan. Jokowi’s plan to raise fuel prices may later knock confidence, however.

IDX may have a new gold miner listed soon. Archi Indonesia, a subsidiary of Rajawali Corpora, is aiming at US$200 million worth of IPO before the year ends. Rajawali Corpora is owned by Peter Sondakh, which acquired Archipelago Resources Plc. last year with a deal valued at US$541 million at the London Stock Exchange. Archi operates in North Sulawesi, Philippines and Vietnam.

USDIDR slipped to 11,976 on Wednesday from 11,987.

SMGR, LPKR

SMGR is eyeing at expansion to property business. The state-owned company plans to set up a new business entity to develop a 200ha land in West Java. The cost for the expansion is expected around Rp200b (US$17.1 million). The project may be co-developed with fellow state-owned entity WIKA, according to SMGR’s corporate secretary. Both companies have signed an MoU to work together in energy, realty and property sectors last month.

LPKR’s Holland Village was said to have been oversubscribed by 150%. The second stage offering of the apartment complex consists of 190 units built on 4ha land and priced at Rp19.5 million/m2.

Technically Speaking...

JCI took another slipup on Wednesday, taking it to finish at 5,174.

As the index lost grip of the 5,200 resistance handle once more, resistance mark, the next support to watch is 5,125 which is the 50-day EMA. Should we broke below this line, more supports are seen at 5,039 and 5,000.

On the upside, resistances are lining up 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 has reversed direction away from the zero line, while RSI is now back at the neutral area again. Volume seems to be steady recently. While all these are somehow good signs for the index, we should remain cautious over the risk of another setback as we approach the upper end of the expected trading range.

Day Ahead

It looks like the consolidation range between 5,100 and 5,250 is likely to persist for now. Lack of key catalysts have put the index in a limbo, but still maintaining its upside potential near the recent highs. Absence of key macro indicators both from abroad and from domestic will shift the market’s attention to the individual stock news and developments.

Click here to download the full update (PDF)

Morning Dew - 23 September 2014

Conundrum

Stocks finished mixed on Monday as the JCI ended slightly down but the IDX30 and LQ-45 indexes finished slightly higher. Lack of fresh catalysts have put the investors to choose to stay on the sidelines for now.

Nickel producers continued to be under pressure by the tumbling nickel prices as the metal fell to a five-month low on the back of concern of declining demand in China. Recent comment from China’s FinMin is seen as dampening the prospects for another stimulus boost. Lou Jiwei confirmed that there won’t be major policy changes to respond to individual economic indicators. Nickel contract for 3-mos delivery fell to US$17,025 a metric ton after briefly touched US$16,924. Last May, the metal still stood at US$21,625, highest since 2012.

USDIDR slipped further to 11,972 on Monday after hitting 12,030 last Thursday. Recently, BI said that the exchange rate should be within the range of Rp11,600 to Rp11,900 against the US$ to support export growth.

SDRA, BCIC

SDRA to merge with Bank Woori Indonesia with shareholders of BWI will be able to own 55.56% of SDRA when the merge is effective. Based on the report dated 25 August 2014, the merge will produce a new commercial bank Bank Woori Saudara. An Extraordinary Shareholders Meeting is to be held on November 7th 2014 and the merge is expected to be effective on December 19th 2014.

BCIC is an acquisition target of J Trust Co. Ltd. with a deal worth Rp4.5trillion or more than three times BCIC’s book value. BCIC which was formerly Bank Century, was bailed out by the government during 2008 global financial crisis.

Technically Speaking...

Monday’s price action brought nothing new so far as the index was relatively steady at the start of the week.

The index is, once again expected to defend the recently reclaimed 5,200 resistance mark, aiming at taking back its recently won 5,251 resistance ahead of the all-time record high at 5,262. Subsequently, the next psychological hurdle for the index at 5,300. On the downside, we have 5,117, which is roughly the same as the 50-day EMA curve. Should we broke below this line, more supports are seen at 5,039 and 5,000.

The MACD has continued to approach the zero line, while RSI is now approaching the overbought area again, volume seems to be steady recently. While all these are somehow good signs for the index, we should remain cautious over the risk of another setback as we approach the upper end of the expected trading range.

Day Ahead

Too early to conclude that the downside is secured. Even as the index returns above 5,200 mark, it is seen struggling to break out of the recent range between 5,100 and 5,250. While the upside prospect has somewhat brightened, the downside risk remains. The coming week will feature manufacturing sector’s performance data in September from major world economies.

Click here to download the full update (PDF)

Morning Dew - 22 September 2014

Clearing the Barrier

JCI finished the week higher at 5,227.58 after a brief spell at 5,250.83. The index is still struggling to clear the hurdle at 5,250-5,262 as lack of significant catalysts brought uncertainties.

Recent FOMC meeting provided nothing new while domestic data also offers limited impacts both negative or positive.

Golden Plantations and Archi Indonesia are scheduled to conduct a mini-expose the coming week. Golden Plantations is involved in CPO business while Archi Indonesia is within the mining sector. Both plan to go public this year. Blue Bird is also another company scheduled for IPO this year. The taxi operator is seen to become the biggest IPO in Indonesia with US$450 million is to be raised from the IPO.

USDIDR slipped to 11,985 on Friday after hitting 12,030 a day earlier. BI official on Friday said that the exchange rate should be within the range of Rp11,600 to Rp11,900 against the US$ to support export growth.

AALI, UNTR, AISA

AALI is set to distribute its interim dividend for the FY14 worth Rp244 per share. The dividend is to be paid on October 28th 2014.

UNTR is also set to distribute its interim dividend worth Rp195 per share on October 28th 2014.

AISA plans to sell 10% of its shares to KKR & Co. Lp. amounting to Rp658b, effectively raising the ownership of KKR to 25%. The sales of 292.6 million shares will be conducted at the price of Rp2,250 per share. Proceeds from the deal will be used to fund the company’s expansion to overseas markets such as Malaysia and Vietnam.

Technically Speaking...

JCI posted gains last week, but still short of breaking through the upper barrier at 5,250. 

The index is, once again expected to defend the recently reclaimed 5,200 

resistance mark, aiming at taking back its recently won 5,251 resistance ahead of the all-time record high at 5,262. Subsequently, the next psychological hurdle for the index at 5,300. On the downside, we have 5,117, which is roughly the same as the 50-day EMA curve. Should we broke below this line, more supports are seen at 5,039 and 5,000.

The MACD has continued to approach the zero line, while RSI is now approaching the overbought area again, volume seems to be steady recently. While all these are somehow good signs for the index, we should remain cautious over the risk of another setback as we approach the upper end of the expected trading range.

Week Ahead

Too early to conclude that the downside is secured. Even as the index returns above 5,200 mark, it is seen struggling to break out of the recent range between 5,100 and 5,250. While the upside prospect has somewhat brightened, the downside risk remains. The coming week will feature manufacturing sector’s performance data in September from major world economies.

Click here to download the full update (PDF)