Less Upbeat on Sales Prospects

28 11 2007

BSS

According to the latest survey, overall business activity rose in September 2007. The CEOs surveyed claimed a higher growth of sales. As a result, corporate profitability in many industries improved as well. Looking ahead, however, the CEOs are less optimistic. They expect slower sales growth over the next six months. Nevertheless, they still believe that profits will grow steadily – hence their plans to increase investment expenditure in the near future.

Overall, Current Sales and Profits Improved. According to the September 2007 survey, the CEOs of Construction, Financial, and Services companies claimed a lower growth of sales. However, almost all other companies claimed a higher growth of sales in the months under survey. As such, overall, sales in the companies surveyed grew at a higher rate than before (the relevant index rose by 6.6% to 131.7). Thus, with stronger sales, the CEOs surveyed claimed better profitability. In particular, our survey reveals that the manufacturing sector recorded good performance in September with profits growing firmly. Overall, across all sectors, the present profits index rose by 2.8% to 113.0. Read the rest of this entry »

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Weekly Outlook Nov26, 2007

26 11 2007

Weekly Outlook : Stocks may arrest their falls this week boosted by the rebound on Wall Street and the upbeat sentiment on regional markets. Moreover, the bad news on Temasek may also be overdone, since the ruling is company specific and should have a minimal impact on listed companies overall. And the historical tendency for stocks to do well in December should also not be disregarded. As such, the market may recover somewhat this week with the JCI heading toward the 2,630-2,650 level.

Stocks listed on the JSX extended their losses last week after the Indonesian anti-monopoly watchdog ruled against Temasek. The decision led to widespread selling as market players fear that foreign investors may be much more cautious now in their investment plans. Other market negatives were the persistently high crude oil prices that raise concerns over weaker corporate profits growth – fuel supplied to industrial customers in Indonesia is not subsidized – and lingering worries over the US economy outlook. Over the week, the JCI lost 99.19 points or 3.7 percent to 2,569.51. Read the rest of this entry »





Weekly Outlook 19 Nov 2007

19 11 2007

The market may again struggle for direction this week. Concerns that high oil prices will hit corporate profitability will likely limit upside potential. Yet at the same time, shares in companies which are not so exposed to rising energy prices may remain attractive given that the economy is continuing to grow at a faster pace. As such, stocks may consolidate this week with the JCI remaining in the range 2,650-2,700.

Another choppy week for Indonesian stocks as heightened concerns over the threat of inflationary pressures and a possible sharp downturn in the US economy were set against new economic data that shows that the Indonesian economy is picking up its growth pace on the back of low domestic interest rates and buoyant commodity prices. Indeed, according to the data released by the central bureau of statistics last week, the Indonesian economy grew at its fastest pace in the last 10 years, clocking up growth of 6.5 percent in 3Q07, or slightly higher than the 6.3 percent growth rate seen in the second quarter of the year.

Sentiment in the market was also buoyed by the successful IPO of state toll road developer Jasa Marga which stands to benefit if the government can finally get its muchheralded infrastructure initiative off the ground. So far, however, the results have not been good – although, going forward, a more concerted effort by the government to get things right in 2008 is expected.
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Trade Outlook November 2007

19 11 2007

Exports in September 2007 dropped to US$ 9.52 bn, down by 0.91% from US$ 9.61 bn in August. Imports, meanwhile, fell to US$ 6.76 bn, or down by 1.37% from US$ 6.85 bn. As a result, the trade balance in September stayed the same at US$ 2.76 bn.

On a yearly basis, exports climbed by 7.64% y-o-y in September 2007. Imports also rose: up by a hefty 19.63% y-o-y. Cumulatively, in the first nine months of 2007, exports grew by 12.88% while imports grew by 17.43% from their levels in the corresponding period of 2006. As a result, the trade balance widened to US$29.35 bn from US$27.85 bn in the first nine months of 2006.

Although exports did indeed decline in September 2007, the figure is still relatively high by historical standards. This suggests global demand is still strong. At the same time, the imports figure in September 2007 – although down – is still relatively high by historical standards. This indicates that domestic economic activity remains firm.

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Inflation Outlook November 2007

13 11 2007

After rising by 0.80% in September 2007, October inflation came in at 0.79% MoM. As such, on a YoY (year-on-on-year) basis, prices rose 6.88% in October from 6.95% in September.

Prices rose in all components of the CPI. The biggest increase was posted by the clothing component (up 2.05%, significantly higher than its level in September of 1.22% MoM), followed by the foodstuffs component (up 1.87% vis-à-vis 1.81% in September), the processed foods component (up by 0.51% vis-à-vis 0.45% in September), the transportation component (up by 0.47% vis-à-vis 0.07% in September) and the housing component (up from 0.18% to 0.21%). However, inflation was lower in the medical care component (down from 0.45% to 0.44%), the education component (down from 1.70% to 0.21% MoM) and the housing component (down from 0.1% to 0.23% MoM). Read the rest of this entry »





Weekly Report 12 November 2007

12 11 2007

JCI Stock Performance


The strong gains in the market this year have resulted in lofty valuations despite Indonesia’s rosy growth prospects, meaning that some stocks are ripe for profit taking. And concerns on corporate profitability will heighten given the surging crude oil prices. Moreover, investors may also come to see that domestic interest rates have now reached a trough, and that there is little room for further rate cuts given the current conditions. Weak regional sentiment will also put pressure on stocks. As such, stocks are likely to head lower this week with the JCI heading toward the 2,650 level.

Stocks listed on the JSX may come under pressure this week. The strong gains in the market this year have resulted in lofty valuations despite Indonesia’s rosy growth prospects, meaning that some stocks are ripe for profit taking. And concerns on corporate profitability will heighten given the surging crude oil prices. Moreover, investors may also come to see that domestic interest rates have now reached a trough, and that there is little room for further rate cuts given the current conditions. Weak regional sentiment will also put pressure on stocks. As such, stocks are likely to head lower this week with the JCI heading toward the 2,650 level. Weekly Market Commentary 12November07





Confidence Down Again

7 11 2007

The Consumer Confidence Index (CCI), which had declined by 1.9% in September, fell further in October, losing 0.9% to a fourmonth low of 82.2. Weaker job growth coupled with concerns over the economy continue to worry consumers and make them anxious in regard to future developments. As such, both components of the CCI saw falls. The Present Situations Index (PSI) dropped the most, down by 2.0% to 62.5, while the Expectations Index (EI) edged down 0.3% to 97.0.

Unlike in September, when declines in confidence were due to transitory factors such as the seasonal surge in prices due to the Idul Fitri celebrations, October’s decline in confidence was mostly driven by concerns over weaker job growth. More over, rising prices and kerosene fuel shortages in some parts of the country have also dampened confidence, especially of people living in urban areas.

Buying intentions weakened further in October. Consumers fear that with tougher times ahead they will see no appreciable improvement in their incomes. And if salaries are not hiked by more than the rate of inflation in the near future, then purchasing power is unlikely to pick up. As such, the proportion of consumers planning to buy durable goods over the next six months slipped from 26.2% to 25.4%, its lowest level since April 2007.

With concerns over unemployment and the kerosene fuel shortages, the index measuring consumer confidence in the government (CCGI) dipped 2.8% to 97.3 in October. In particular, consumers had less confidence in the government’s ability to bring about brisker economic growth. And, at the same time, consumers still had doubts in the government’s ability to stabilize

the price of goods (this component of the CCGI fell 2.3% to 71.6, which is only 0.2% higher than its historic low of 71.4 in May 2007).