OPEC suspension no impact on Rupiah; big action in Sembmar

OPEC winners and losers

I am putting this here as a record for education, future reference.

OPEC announced a deal last night to cut production. Is it a big deal? Appears to be. WTI was up 10.33% on the day (closed at 8.34% gain). This makes it the biggest day move year to date.

Additionally, Indonesia’s OPEC membership was suspended. So far I cannot find any official release from OPEC’s website although this piece of information is carried by several news channels including Reuters, OilPrice.com, Zerohedge.

From OilPrice.com,

Indonesia Suspended From OPEC

The cartel agreed at the ministerial meeting today to suspend Indonesia from the organization, Reuters reports, citing an OPEC source.

Indonesia returned to full-fledged OPEC membership in December last year, after it had suspended its membership in December 2008, when its oil-exporting capabilities had started to wane, OPEC’s website says.

According to a survey by S&P Global Platts, Indonesia had been pumping steadily around 730,000 bpd in recent months. OPEC’s secondary sources data put Indonesia’s output at 722,000 bpd in October, down from 724,000 bpd in September.

 

This is not the first time that Indonesia was suspended. According to OPEC,

The nation joined OPEC initially in 1962 and suspended its membership as of 1 January 2009, but this was reactivated as of 1 January 2016.

 

Based on 2015 figures, Indonesia is ranked 11th out of 14 member countries in terms of oil production. In terms of proven reserves, it is ranked 13th. OPEC Annual Statistics Bulletin 2015 is available here.

USDIDR daily chart late November 2016 - present

USDIDR daily chart late November 2016 – present

A quick inspection of USDIDR (USDollar to Indonesia Rupiah) chart on TradingView.com, either this information was already baked into price and therefore ‘non-news’, otherwise it has no market moving impact on the Indonesia Rupiah at all. If any Indonesia readers can tell us if this impacted any listed company on the Jakarta Stock Exchange, I appreciate thank you very much.

 

Biggest volume traded in Sembmarine (S51.SG) in 9 years

My friendly broker informed me that trading was unusual in Keppel Corp yesterday with buys in big lot sizes. This was hours before OPEC’s deal which could account for the big rally in SiMSCI. As I have written before, Keppel Corp is one of three ‘Oil and Gas‘ stocks in Singapore that retail investors recognise with. After inspection, Keppel’s price action does not appear to be unusual. Now what turns out to be the whopper is the trading volume in Sembmarine – this is the biggest volume changed hands in a day since 19 23 October 2007!

Sembmarine daily chart March 2016 - present

Sembmarine daily chart March 2016 – present

Before I can even write price down with high volume is bearish, Sembmarine is up 5.19% percent today. This is something to sit on for the rest of the day. In my head ‘speculators/insiders got wind’, ‘speculators/insiders front run/bought before the news’, ‘the deal exceeded the expectations?’ In my opinion, buyers still have to consider whether OPEC’s announcement is truly bullish for Sembmarine. As far as long term charts are concerned, the stock is still trending down and trading near to 52-week low. Also note that Sembmarine was removed from the Straits Times Index on 19 September.

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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.   Soh's Twitter account @sohtionghum was ranked #23 out of The Top 70 Twitter Accounts To Follow In 2015 by MahiFX.   Disclaimer notice: "I do not have a financial advisor's license. I am not qualified by any regulator to give financial advice. I do not know you the reader. Your investment means and motive may be different from me. My posts here are based on observations and meant for education. I am not responsible for for any consequence from your actions."
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