MARKET OUTLOOK Friday, September 5, 2008
Let's bleed... Indonesia shares are likely to trade lower, weighed down by bearish trend in International markets amid signs of a global economic slow down. In the U.S., stocks plunged as the Dow Jones Industrial Average fell more than 300 points after Nordstrom and other retailers posted disappointing August sales, while balance sheet concerns weighed on big banks like Lehman Brothers and Merrill Lynch. More broadly, worries that an economic slowdown is spreading worldwide hurt all sectors, most notably commodities-sensitive issues like Caterpillar, off 3.79, or 5.6%, at 63.94. For much of 2008, commodity prices have behaved as if growth in China and other emerging nations would compensate for the housing and financial crisis in the U.S. Now, the message from markets is that the slowdown is spreading worldwide, without any relief expected soon in the U.S. One of the weakest stocks on the Dow to close the day was Caterpillar, because the maker of construction and mining equipment does much of its business overseas. For the session, the Dow Jones Industrial Average fell 344.65 points, or 2.99%, to 11188.23, marking its biggest one-day drop since June 26 and its third worst percentage drop this year. Separately, the broad Standard & Poor's 500 fell 37.90, or 2.97%, to 1237.08, and the Nasdaq Composite shed 74.69 points, or 3.2%, to 2259.04. Indonesian markets have their own story...but, the central bank's decision to hike its benchmark interest rate by 25 basis points to 9.25% may worsen the already battered sentiment. A local big fund may have to launch a huge surgery before making an entry at any level below 2020 of the main index. Main index could move up and down by 64 points Main Index 2008-2080 UNSP: 1010-1,200. There has been some mild confirmation from officials at the company about who has bought shares of its unit. Although everything looks sketchy due to its preliminary stage of talks, UNSP is on the right track to develop a good plantation business. BUMI: 4,425-4,800. It has fallen 46% from its year-high and will likely to continue to correct to find a strong ground for building huge volume which could be taken between the "extreme" range of IDR3,700-IDR4,400. Business outlook remains promising given its status as the largest coal producer in Indonesia. A bearish confirmation for another 16% drop may be formed at IDR4,400. For long term lovers, the time for collection is coming... ASII: 19,400-21,200. Any correction in ASII may give you a wide open opportunity to collect for mid term investment. Any price below 20K should be considered good levels for buying these shares ahead of its plan to split its shares in early next year. Sales of its new car and motorcycles have so far been very impressive, but its holding in cpo-related unit Astra Agro has contributed a mildly negative sentiment. MEDC: 4,300-4,900. It may be trading wide given declined volume. Overall, there are talks that MEDC is considering to give an interim or bonus dividend after recent assets selloff. It is now trading at only a p/e of 7.8 times its 2009 prospective earnings. BUY at the lower end of the range. TLKM: 7,350-7,800. There should be some anomalies in the trading of Telkom today...be alert and feel blessed if you can get Telkom at any level below IDR7,400. Its ADRs in NY fell 4.6% to IDR7,500. BMRI: 2,650-2,900. Please take your buy order at the pre-opening trade at IDR2,650...It's gonna be a lucky draw and a door prize for short term cash profit. There should be nothing to worry to invest your fund in these shares for long term investment. SPECIAL MENTION: TINS: 2,050-2,500. It is now trading at a p/e of only 4.3 times expected 2009 earnings. Tin prices have so far been steady given shortage of supply despite declining demand. The company said it has found new tin reserves with P1 at 8.81 million tons. BUY at the lower end of the range or at any level below IDR2,000 for mid term investment. MONITORING: (please take a look at the lower end of the ranges) BBRI: 5,900-6,500 BBCA: 3,100-3,500 TBLA: 460-560 BTEL: 260-300 BNBR: 245-320 ISAT: 5,750-6,200 WIKA: 280-330 BBNI: 1,220-1,350 UNTR: 9,600-10,600 DISCLAIMER: The information herein is based on information obtained from sources believed to be reliable, but I do not make any representation or warranty, express or implied, as to its accuracy, completeness, timeliness or correctness for any particular purpose. Opinions expressed are subject to change without notice. Any recommendation contained herein does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. The information herein is published for the information of addressees only and is not to be taken in substitution for the exercise of judgment by addressees, who should obtain separate legal or financial advice. I accept no liability for any direct, special, indirect, consequential, incidental damages or any other loss or damages of any kind arising from any use of the information herein (including any error, omission or misstatement herein, negligent or otherwise) or further communication thereof, even if I have been advised of the possibility thereof. The information herein is not to be construed as an offer or a solicitation of an offer to buy or sell any securities, futures, options or other financial instruments or to provide any investment advice or services. The information herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation.
