Market View - 4 August 2009

Most Asian stocks rose yesterday as encouraging comments came from Alan Greenspan and Nouriel Roubini. The New York University economist Nouriel Roubini, known as Dr. Doom, said that commodity prices may extend their rally in 2010 as the global recession abates. Earlier before, the former Federal Reserve Chairman Alan Greenspan said the recession might be ending. Nikkei slid slightly 4.36 pts (-0.04%) to 10,352 while Hangseng surged 233.93 pts (+1.14%) to 20,807. JCI added 15.56 pts (+0.67%) to 2,338. DJIA surged to 9,286, the highest level in 2009, posted a 1.3% (+114 pts) gain as positive results from manufacturing index, construction spending and China’s Purchasing Managers’ Index. Manufacturing index rose to 48.9 in July from 44.8 in June while construction spending rose 0.3% in June from -0.8% in May. China’s PMI rose to 52.8 in July, the hishest level in 2009, from 51.8 in June.                         The Central Statistics Bureau announced consumer prices rose 0.45% (mom) in July, or 2.71% yoy, lower than June’s 3.65% yoy. Lower inflation opened room for Bank Indonesia to cut BI Rate by 25 bps to 6.5% this Wednesday (5/8) on Rapat Dewan Gubernur BI. Our range for JCI today is 2,324-2,351 and our picks are Indofood (INDF, Buy, R-2,850, S-2,300), Astra International(ASII, Buy, R-32,400, S-30,000), Perusahaan Gas Negara (PGAS, Buy, R-3,875, S-3,425), Int’l Nickel Indonesia (INCO, Buy, R-5,350, S-4,050) and Jasa Marga (JSMR, Buy, R-1,810, S-1,680).