Sinarmas Bank Upside Movement

Sinarmas Bank with ticker BSIM in Jakarta Stock Exchange (JKSE) have developed an upside movement since mid-December, and technical is showing an overbought across the board.

Back in 10^th of December, Beritasatu.com announced that BSIM will issue new shares to the market in order to increase their capital. According to the news, CFO of Sinarmas Multiartha, the parent company of BSIM, Kurniawan Udjaja said that BSIM will be a part of BUKU III bank with capital between 5-30Trillion rupiah by 2016. Per September 2014, BSIM is currently a part of BUKU II, which only has capital between 1-5Trillion rupiah. The parent company of BSIM, Sinarmas Multiartha will also increase their ownership by 3% from their current ownership of 57%. You can read more here

The same website also announced that BSIM will enter up to 60-90 places in the Java Island in 2015 for Micro, Small and Medium Businesses (UMKM). Currently, BSIM only have 6% in UMKM credit according to BSIM’s president director, whereas most of the business is concentrated in car and motorcycle credit, but with the current Indonesian economic situation it will be hard to issue credit for automobiles, thus BSIM will increase credit for UMKM. You can read more here

The positive news has moved the stock price by about 30% for a month alone. Foreign investors have entered and massively bought BSIM shares, below is the data of shares being bought by foreign investors after one month.

Foreign Transaction

Technical side of the stock is overbought, RSI and MACD are showing overbought but MA5 and 10 is showing a bullish signal. Referring to the technical chart, the stock price might have a short correction in the near future, but like my previous BSIM review on August 2014, in the long term BSIM have a strong upside potential. You can read my previous review on BSIM in here.

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