Market View - August 27, 2009

Asian markets rose yesterday in response to a better-than-expected US consumer confidence that rose to 54.1 in August, President Obama’s nomination of the Fed Chairman Ben Bernanke for a second term and a better-than-expected German business confidence that rose to 90.5 in August, which was the highest level since September last year. Nikkei surged 142.35 pts (+1.36%) to 10,639, Shanghai advanced 51.79 pts (+1.78%) to 2,967 and Hangseng added 21.08 pts (+0.10%) to 20,456. However, European markets fell due to lower-than-expected result from Swiss Life Holding AG. JCI was slightly down by 0.43 pts (-0.02%) to 2,380. US markets mostly moved flat despite better-than-expected result from new home sales and durable orders. DJIA added 4.23 pts to 9,543 while Nasdaq added 0.20 pts to 2,024. New home sales rose 9.62% to 433,000 in July and durable orders rose 4.9% in July. Asian Development Bank in their latest statement forecasted Indonesia would grow 6% next year. However, the ADB mentioned that Asia, including Indonesia, should expand the domestic demand in response to a weak export outlook. On technical, there is a strong resistance for JCI at 2,400, which is very near to today’s 2nd resistance at 2,399. Indicators such as stochastic and MACD histogram still indicated JCI was on the way up. However, lower metals and oil price could negatively effect our market today. Our range for JCI today is 2,368 to 2,389. Our picks are Telekomunikasi Indonesia(TLKM, Buy, R-8,800, S-8,100), Indofood (INDF, Buy, R-2,850, S-2,350), Jasa Marga (JSMR, Buy, R-1,950, S-1,750), PP London Sumatera (LSIP, Buy, R-9,350, S-7,350), and Indocement Tunggal Prakasa (INTP, Buy, R-11,000, S-9,500).