What play is left in town now? Smart money would find the most probable play of trading and investment left under current circumstances by screening and highlighting those who are benefiting from crude oil-driven commodities prices collapse. In case of Indonesian stocks, it is definitely not the traditional picks of banks or transportation stocks as these stocks have quite run up already from the base and for transportation they have failed to secure strong support of investors for the past 2 years of current primary bullish cycles.
We currently advise our clients to look at and reap opportunistic gain from petrochemical-related stocks. As the short-term/intermediate decrease in oil prices, petrochemical margins are expected to grow robust in coming quarters, and we expect this may continue for the remainder of 2011. The fact that Indonesia is a net-importer of most petrochemical products would then add more into calculations. Petrochemical-related Indonesian stocks would include a few names from the giant PT Barito Pacific, Tbk to other similar but smaller sized companies, and a few companies which rely their most raw materials from petrochemical products such as PT Indopoly Swakarsa Industry, Tbk. All of this petrochemical sub-sector is a few from those are left and lagged in Indonesian stock market, thus open an arguably prospective buying opportunity for at least the remainder of 2011. Please, note that these are all opportunistic buying and should be watched closely for the time being. '+'
