Indonesia

Indonesia: UOBK sees more downside to the Jakarta Composite Index . The JCI has shed gains to drop ~6% from its Sep peak. The gap down last wk was accompanied by several bearish candlesticks, signaling a negative shift in momentum. MACD reading is featuring a negative cross over and also falling below the centreline, reinforcing the potential for a further pullback. Several support levels at 5,115 and 5,090 were also breached. Applying the Fibonnaci Retracement, the house believes JCI could fall further to the 4,750 - 4,800 level. Fundamentally, UOBK notes the correction risk factors are: i) political uncertainties with regard to Parliament, ii) earnings risk, iii) rupiah depreciation as foreign investors have taken out more than US$500m , and iv) JCI trading at 1std dev above its 5-yr mean prior to the recent correction. Key SGX-listed proxies to the Indonesia market include Gallant Venture, Sinarmas Land, JC&C