Market Outlook 23-09-2008

Testing your patience and emotion…

Indonesia shares are likely to consolidate after gains in the previous four sessions, with overnight sharp fall on Wall Street temporary shocking sentiment despite strong oil prices.

Mild buying in commodity-related stocks on higher oil prices should held defend the main index from falling deeper, but I must say that “it’s going to be a healthy correction…”.

In the U.S., stocks plunged, wiping out Friday's gains with fall possibly aggravated by government ban on "short selling" financial stocks now extended to include General Motors, General Electric and others. Move may have contributed to downdraft by taking hedge funds out of market as buyers. Many funds were market neutral and bet against one universe of stocks while betting on another. Now, those funds are sitting out the market until the rule expires on Oct. 2. Plus, questions linger about form of government's efforts to unclog mortgage-securities market, how Wall Street will emerge from recent crisis
christine lee:
UNSP: 800-920. It is still trading below its fair value of IDR1,600 based on a simple DCF. BUY on weakness or at any level below IDR780. UNSP is set to acquire more plantation areas in coming years to increase revenue.

SPECIAL MENTION:

ANTAM: 1,450-1,800. It has long been forgotten due to weak 2008 performance and management's inability to pass on the falling commodity prices to diversification projects. Overall, as gold and nickel prices are likely set to increase in coming months due to increased demand, Antam is worth collected for mid term investment. It is now trading at a P/E of 3.8 times its 2009 prospective earnings and a PBV of only 1.77 times, compared to its closest rival Inco which has a P/E of 4.2 times and PBV of 2.2 times.

MONITORING:
TINS: 1,590-1,900
TBLA: 400-460
LSIP: 3,900-4,450
AALI: 13,800-15,400
BMRI: 2,625-2,900
BBRI: 5,600-6,000
CTRP: 180-260
INKP: 1,450-1,900
SMDM: 120-210
SMSM: 750-1,200