Avoid Coals, Plantation and Hard Metals as Oil Prices Dropped Significantly, Indonesia’s Banks and Consumer Goods Back to Business (Early Bird) - AmCapital

Goldman Sachs’s negative call on oil prices (estimating $20 price drop by spring) and Alcoa’s missing estimate dragged down Dow (↓1%) and S&P (↓0.78%). Declining energy prices, WTI Crude (↓$3.67 to $106.25) and Brent (↓$3.06 to $120.92), driven by Goldman’s negative call, and declining Yen triggers Asian Market to open mixed this morning, Nikkei 225 (↑0.39%), Kospi (↓0.02%), ASX (↑0.23%) and NZX (↓0.21%). JCI might be opened a bit lower as coal price and metal price might be under selling pressure, Rupiah headed lower this morning (↑10 IDR to 8,662) and Indo’s CDS accelerating to 140 bps, implying Indo’s Gvt bond might facing selling pressure as well. We recommend taking a hard look at banks (small caps such as BJBR IJ having the most attractive PBV and big caps such as BBRI IJ and BMRI IJ) and consumer goods names such as INDF IJ and MYOR IJ benefiting from declining energy prices and food Prices (wheat price ↓to $7.55/bushel).

Corporate Headlines:
PT Astra Otoparts Tbk (AUTO IJ): will split its stock 1:3 to add more liquidity in the market. Thus free float will be accumulating to 100 million shares from 33 million shares. Thus, rumor of go private dies down.
PT XL Axiata Tbk (EXCL): is planning to increase dividend payout ratio this year from traditionally 15%-20% of payout ratio to 30% payout ratio, pending the General Meeting Shareholders

Banking Sector:
Bank Indonesia extended the one- month holding period on central bank notes, or SBI, to six months, Governor Darmin Nasution told local business newspapers.