Monday, June 16, 2008

Indonesia shares are likely to trade higher but may remain in a risky zone if the main index fails to stay above or break through 2450-resistance. In the U.S., stocks rose as traders found the silver lining in the dark clouds of inflation, consumer-confidence data and oil prices. Investors were relieved to close the books on a week when yields on Treasurys spiked, an airline index hit its lowest-ever mark and many bank shares fell to levels not seen in more than five years. Stability has been hard to find in many markets and economic data: Consumer prices rose 4.2% in May from a year earlier, stoking inflation worries while consumer confidence fell to its lowest level in 26 years in early June. Oil prices fell but remain worryingly close to $135 a barrel. Lehman Brothers rose 14%, snapping out of its downward spiral as stockholders applauded the choice of Herbert McDade to head operations. Here, in Indonesia, the central bank may continue to matintain its prudent monetary policies, while observing accelerated inflationary pressure. It may continue to hike interest rate by another 25 basis points next month to contain the inflation. The rupiah has so far shown its resilient against the U.S. dollar, but may be stuck within 9,200-9,400 for the rest of the quarter. The main index may go up and down by 16 and 36 points. Main index: 2376-2434 S2: 2356 R2: 2450

TLKM: 7,500-7,750. It is now trading at a p/e of 11.87 times its 2008 prospective earnings, compared with Indosat at 14.38 times. But on PBV terms, Telkom is trading at 4.2 times, compared with Indosat at 2.02 times. Its ADRS in NY Friday rose 1.5% to $32.48, or equal with IDR7,555 based on USD/IDR of IDR9,305.

ISAT: 6,200-6,800. Qtel qould only make a llimited tender offer of a maximum of 24.2%, but it may also possible NOT to launch any. Its ADRs in NY rose 1.3% to $34.84, or equal with IDR6,483. It is as sketchy as it has been so far...

BUMI: 7,850-8,600. With all respect, IDR111 a share cash total dividend is disappointing... But, fundamentals are sound with building volume for long term investment likely coloring the whole trade mechanism for the rest of the month. Some local big funds may try to maintain Bumi to stay within proper prices despite a natural corrrection.

ANTM: 3,200-3,500. It has formed a joint venture company with Herald to explore and exploit black tin reserves in North Sumatra which has so far receievd opposition from local people given its agressive land clearence. The company may announce a new bid for Herald later this week. BUY on weakness or at any level below IDR3,200.

INCO: 6,200-6,700. Weird charting, with buying interest likely fading whenever it is above IDR6,750, but may reoccur whenever it is below IDR6,300. BUY on weakness

PTBA: 14,400-15,100. Chart says it may correct if it fails to break above IDR14,950. It is now trading at a p/e of 29.5 times 2008 prospective earnings, compared with 21 times of Bumi. I still go with sell on strength...

BMRI: 2,750-2,950. There may be sizable fresh funds coming in these shares ahead of government's plan to POSSIBLY sell a further up to 15% stake in the bank for helping budget constraint. Overall, I still go with buy at any level for mid term investment and attractive dividend distribution. It is now trading at a pbv pf only 1.92 times, compared with 3 times of the industrial average. In any metric, the bank looks more attractive than its competition.

BNBR: 520-600. There MAY be some surprising corporate actions over the next coming months, particularly after the completion of the merger of units in the company. soame appraisal companies are now working to revalue this company to support the action. BUY on weakness.

BBCA: 2,525-2,900 WICO: 69-90 TBLA: 660-900
UNSP: 1,850-2,100 MYRX: 70-100 MIRA: 600-800
BBRI: 5,000-5,350 BBNI: 1,190-1,320 PNBN: 900-1,050 ouch....

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