MARKET OUTLOOK

Friday, August 8, 2008 Indonesia shares are likely to continue to trade within a consolidation range as gains from buying in commodity-related stocks will be offset by selling in most non-commodity related stocks following mild rebound in commodity prices due to lower oil prices.There is a very interesting study about the movement of oil prices... Whenever theglobal economy recovers, the oil prices may resume its journey to the North. Timing would not be more than three months after I write this outlook...So, investment horizon and set are playing big roles at present. If you are long term lovers, I believe that your holding in commodity-related stocks would give you significant returns. If you are short term players, you are then playing and scaling your guts every time you hit either the buy or the sell buttons.Today we would see our lovely stock market moving in a directionless mode but in a more attractive way than yesterday.The main index may go up and down by 29 points to reflect a beta trade of 1.3 times.Main index: 2170-2222 TLKM: 7,700-8,200. It may remain moving within this range, with any success breaking above the resistance level of 8,000, would drive the share price to test another high of 8,200. Otherwise, it would move on the other way around... PTBA: 12,200-13,600. It has shown some impressive movement so far, but I still fear of sudden correction given its expensive status. BUY on weakness. BUMI: 5,000-6,000. There has been a shift of support level from IDR4,800 to IDR5,000 which could assure a temporary consolidation. Buy at any level when it breaks above IDR5,500-breakout level. Fundamentals are sound with second half period may improving significantly given new selling prices of coal and an increase in volumes. TINS: 28,200-32,000. There is an short term investment risk in these shares as the local administration of Bangka will likely ask Timah to increase its royalty payment to the administration to 6% from 3% at present. On fundamental basis, Timah is trading below its fair value of IDR34,000 basedon business outlook model for next year. Best buy is at any level below IDr28,000. MEDC: 4,800-5,200. It may be trading wide, but would suffer from suddenh correction if it fails to break above IDr5,resistance levelevel. The company is likely to diversify its business to non gas and oil business like food and agricultural sector. It is too early and sketchy to value its new plan of business diversification... It, however, has started with selling of its stake in Apexindo which would drive its 2008 net profit to jump significantly from 2007. Fair value is atIDR6,400. BBCA: 2,850-3,100. On chart reading, BCA may suffer from mild correction. BUY on weakness. BMRI: 2,850-3,200. It is now trading at a PBV of 1.9 times, way below the average of the banking industry. Fair value remains at IDR3,900 based on DCF. First half net profit will likely up due to its sizable holding in government bonds. Accumulate at the LOWER end of the range BBRI: 6,000-6,400. It may find a strong resistance at IDR6,400 which could become a level of profit taking by retail investors. If not broken, the share price may be facing hard landing. SPECIAL MENTION: CPIN: 830-1,200. 2008 net profit likely more than doubled to IDR420 billion, with sales jumping more than 50%.This could could reflect growing business despite high inflation. 12-month target is at IDR1,600 BUY on weakness. MONITORING: CTRS: 480-590 BBNI: 1,290-1,550TBLA: 540-650 SMRA: 340-410LSIP: 6,200-7,500 KAEF: 140-180 PNBN: 830-960 CTRA: 470-540