As we promised on June 28 for another intermediate bullish wake-up call, following is our condensed note on the position.
-June 6, Goldman Sachs upgraded Indonesia to overweight considering Indonesia both present strong domestic demand stories and have structural programs in place for medium-term economic improvements. Indonesia has the strongest earnings growth in this sub-region. -June 27, Morgan Stanley upgraded Indonesia to neutral after lowering it into underweight on May 27. Key factors in this change: 1) Earnings Revisions Breadth rank rose to #2 from #16 in the model 2) Business Cycle rank improved to #1 from #10. Overall rank has improved to #6 from #17. ( http://www.bloomberg.com/news/2011-06-28/taiwan-shares-cut-at-morgan-stanley-indonesia-rating-raised.html ) However, inflation is still a concern, and fuel subsidy cut can take place anytime during the remainder of 2011 ( http://www.reuters.com/article/2011/06/28/indonesia-economy-fuel-idUSJKB00457920110628 ). On technical, IHSG ended its mini version of head and shoulders chart pattern spanning from 2nd week of April through 2nd week of June, and has surpassed the neckline. In comparison to its triple tops formation in its previous major correction at the end of 2010 and into 1st quarter of this year, current chart pattern correction has become smaller and shorter indicates that the potential upside which will follow will also be limited. Having said this, it is worth noted on summer startegy laid out by Goldman Sachs this June for Asia Pacific. The bottom line is that from big macro to focused micro and non-traditional. Macro players have been suggested micro-themes, defensives, cross-country, and volatility opportunities. '+' On Tue, Jun 28, 2011 at 2:21 PM, positif01 <[email protected]> wrote: > We have formally declared earlier in the day to our clients that on > technical, IHSG mid-term correction is over, and on fundamental valuation > wise, Indonesia equity has been restored to the picture. Meanwhile, re-focus > on you winning stock watch list build, and be prepared to take advantage. > Place strong emphasis on strengthened group industry and we would like to > prefer micro theme ahead. > > Details will follow. > > '+' >
