Tuesday, September 1, 2009

Market View - September 02, 2009

Most Asian markets rose yesterday after a positive result from China’s PMI. Nikkei added 0.36% (+37.53 pts) to 10,530, Hangseng gained 0.75% (+148.11 pts) to 19,872 and Shanghai was up 0.60% (+15.98 pts) to 2,683. China’s Purchasing Managers’ Index rose to 54 in August from 53.3 the month before. However, JCI fell 0.62% (-14.62%) to 2,326. Positive economic reports on housing and manufacturing did very little to uphold US equity markets. DJIA gave up 2% (-185.68 pts) to finish at 9,130 and Nasdaq also shed 2% (-40.17 pts) to 1,968. Pending home sales rose 3.2% in July, much better than the market expected. Meanwhile, the Institute for Supply Management Index rose 8.18% to 52.9 in August. The Central Statistics Bureau announced yesterday that August’s inflation rose 0.56% mom or 2.75% yoy; slightly above 2.71% in July. This Thursday (3/0) Bank Indonesia will hold its monthly Rapat Dewan Gubernur. Markets expect BI to keep BI Rate at the current level 6.50%. On a seperate occasion, Finance Minister Sri Mulyani forecasted our GDP will expand 4.3% this year. Based on technical, indicators such as stochastic and MACD suggest JCI could continue its pullback. We would use 61.8% fibonacci retracement at 2,170 as our strong support and 70.4% fibo at 2,425 as our strong resistance. Today we expect JCI will be trading in a 2,316 to 2,346 range. Our picks are Indocement Tunggal Prakasa (INTP, Buy, R-11,000, S-9,500), Indofood (INDF, Buy, R-2,850, S-2,350), Perusahaan Gas Negara(PGAS, Buy, R-4,000, S-3,225), Astra International (ASII, Buy, R-32,000, S-28,000), and Unilever (UNVR, Buy, R-11,000, S-10,000).