The Moneymarket
By end of 2013 Rupiah tend to ease fluctuation in
Christmas season; only trouble was that Rupiah still sank deep to Rp12,250 per
USD. All quite on the market front in the solemn air of Christmas and new
year’s mood 2014. Even if it strengthened it could not be any stronger than
Rp 12,000 per USD.
In the USA not too many positive data were noteworthy to
be released this week. Last week end America already released data of GDP which
was predicted at above 3.6% against previous revision at the same level in
quarter III – 2013 which was the last revision.
The market had anticipated that US economic growth was
above 3.6% since it was known that America’s economy was recovering. Evidently
US economic growth was at the level of 4.1% in quarter III-2013. Early last
week data was released of US consumers sentiment at predicted 83.5 against the
previous 82.5. All would serve as positive sentiment to USD and negative
pressure on rupiah. If released below that level it could pose as negative
pressure on USD.
Toward year end, USD liquidity contracted and the space
of curveline narrowed. Meanwhile from China there was no data worthy of
release; the same was with Europe. Toward holiday season probably Rupiah
movement would not be notable but the potential was still there to slump to Rp
12,250 per USD.
So this year 2013 was a hard year for Rupiah. Over the
year Rupiah had been depreciated by around 25%. The culprit was condition of national
economy which was not in good shape and made worse by the Tappering of issue by
the Fed in the USA. Outcome of the FOMC meeting in December decided that
Tappering Off would be exercised in January 2014 by reducing purchase of bonds
worth USD 10 billion, and Rupiah fell to Rp 12,190 per USD.
Last week, USD strengthened to its highest position in
past 5 years against Yen. This made shares in Japan’s stockmarkets to
strengthen at year end. Last Thursday [26/12], USD was apprediated to 104.08
Yen, the highest position since 2008 when USD worth 104.71 Yen. Some brokers
estimated that USD would continue to strengthen and could even reach 105 Yen
per USD if unemployment in the USA was reduced. Besides investires would also
monitor prices of consumers good in Japan as investors were expecting USD to
continue strengthening.
At home Rupiah had sound back up by Government’ regulation
to make it mandatory to use Rupiah as medium of payment. It was now compulsory
for all transaction of goods and services in shopping centers at home to use
Rupiah ad medium. To use foreign currency in transactions at the domestic
markets was against Law no 7 year 2011 on use of currencies.
The Government was now focusing attention on the habit of
using foreign currencies as payment in modern shopping centers., There were two
regulations of the Ministry of Trade which strongly obliged transactions to use
Rupiah as medium. There would be sanction for law breakers, from written notice
to cancellation of business permit.
The Government would not tolerate shopping centers using
foreign currency as medium of transaction. The Government would act firmly on
these practices to protect Rupiah value. The two regulations referred to by Sri
were : Permendag No. 70/2013 on the Guidelines on the Management of Traditional
Market places, shopping centers, modern shops and Permendag no. 35/2013 on the
exposure of prices of goods and services on price tags.
Article 12 of Permendag No 70/2013 stated that the price
of rentals as referred to in agreements must be stated in Rupiah. Article 6
[1]. Article 6 [1] Permendag no 6 [1] year 2003 regulated sanctions to be put
on traders and Article 6 [2] regulated prices of goods and services which must
be quoted in Rupiah.
The Government only permitted transactions based on
foreign currencies at international airports such as in tax-free shops in
airports and not outside airport boundaries.
Indonesian businessmen had asked the Government to take
action on transaction practices using foreign currencies in the domestic
market. Government’s firm action comforted the market because to quote in
Rupiah would also burden the businessworld. Fluctuation of Rupiah value in a
situation where shop rents were quoted in USD burdened tenants in paying their
rental fees.
Nearly 60% of malls in Jakarta quoted their room rents in
USD. This burdened retail tenants heavily in times when exchange rate
fluctuated like today. Increase of dollar-based room rents burdened retailer
tenants heavily. Rupiah depreciation troubled the real sector even more as
basic electricity tariff increased. From the above picture for last week till
end of year Rupiah was predicted to be in the range of Rp 12,000 – Rp 12,250 per
USD due to minimum positive sentiment.
The Moneymarket
Meanwhile index of IHSG during transaction on Tuesday
[24/12] for two days before Christmas ended at 4,402.83 after inching up by
0.3% or 13.2 points. Foreign investors posted net sell of Rp 12.2 billion. Index
managed to enter the positive zone once more toward end of trading session. The
highest level was 4,206.64 and the lowest at 4,174.46.
Index of LQ45 rose by 0.7%, index of JII inched up by
1.1% and index of ISSI Minfra 18 rose by 0.8% and IDX 30 inched up by 0.7%
Highest strengthening was in the various industry sector 2.02% followed by
shares in manufacturing 1.03%. Worst weakening was in the trading sector 0.4%
and financial sector 0.2%.
Generally IHSG was closed below 4,205. Acts of window
dressing had not been visible. Generally index did not make it to be closed
above 4,205 while regional index was fairly good. Index of Hang Seng was back
on its up going track. Straits times index [STI] also broke through resistant
3,110. It was true that majority of sian stockmarkets strengthened during
Thursday transaction [26/2]. Investors were optimistic about the prospect of
global economy in line with US economic data.
Index of NIKKEI inched up by 0.9%; index of Shanghai
inched down by 0.1%. Meanwhile stockmarkets of Australia, New Zealand, Hong
Kong and Jakarta dropped. Some people were celebrating Boxing Day and
Christmas. Index had support from data of order for durable goods which
increased in November 2013. Meanwhile signals of business expenditure for
capital goods was also showing highest increase for the past one year.
Data of US durable goods was showing upturn. Order for
transportation equipments rise by 3.5% in November. Economic could only expect
to increase by 2% while price of house in America in October increased by 8.2%
against same period in 2012 while in September 2013 the increase was 0.5%.
Index of NIKKAI in Toyo continued strengthening toward
highest level in the past 6 years. The record was attained after increasing in
4 transactions thanks to Yen’s weakening to 104.84 Yen per USD from the lowest
level the week before at 104.64 Yen per USD.
Meanwhile Shanghai stockmarket weakened by 2,100 points
after the Central Bank of China launched open market operations at the value of
USD 49 billion early last weekend. Today the people’s Bank of China was having
surplus of 1.5 trillion Yuan or 219 billion USD. This policy brought pressures
on shares of the banking sector like Merchant’s Bank which dropped by more than
2% and shares of Minsheng Bank sinking by 1%. Investors were also responding to
economic projection which reached 7.6%, exceeding Government’s target of 7.5%.
Index of Kospi inched up although only 0.1%. Index of
KOSPI had rally in six last transactions toward highest level in the past
month. Weakening of Yen triggered downturn in exporter’s share such as Hyundai
Motor and Samsung Electronics respectively by 0.2%.
Meanwhile US stockmarkets ended up higher during Tuesday
session [24/12]. Strengthening was in line with data of durable goods which was
positive. Index of Dow Jones improved record of closing session after going up
by 0.3% to 16,357.55. Index of S&P strengthened by 0.2% to 1,833.32.
meanwhile index of Nasdaq inched up by 0.25 to 4,155.42. Index of S&P in
Wall Street was jacked by good
performance of technology shares like Facebook Inc, Twitter Inc and Yahoo Inc.
In this month of December 2013. Index of S&P had
rellied by 1.5% so it was positive for internet based shares. During Thursday
session [26/12] after Christmas holiday could serve as evident that the shares
would rally again during year-end session of 2013. Shares of Facebook under
S&P had inched up by 0.16%. This increase made them one of the best players
in December with 23% increase. The year 2013 had posted increase of 118%.
Facebook shares had posted strengthening for over 52 weeks as highest increase
of USD 58.58 per share. Shares of Yahoo Inc strengthened by 10% in 52 weeks.
The moment of New year was fading out, there were even
worries toward year end 2013. How could they not worry because IHSG which was
initially expected to break through 5,000 till end of year continued to slump
even to below psychological level of 4,000 last August. Today index was not any
higher than 4,100 – 4,200.
Ever since closing session a year ago till December 16,
2013 last, index was noted as falling by 4.42%. This indicated that index had
arrived at saturated stage which means technically index had the potential to
strengthen. Once index touched 5,274.98 for its highest level on May 2013 and
fell to its lowest level of 3,967.64 on August 27 2013. Meanwhile, since early
this month till December 16, 2013 index was noted to drop to 4.54%.
Weakening of IHSG was followed by depreciation of Rupiah
to above Rp 12,000 per USD. Last week, players of the stockmarkets were
anxiously waiting for the Fed’s action to launch Tapppering Off. If axing of
stimulus were done this year, it would pose as negative sentiment to IHSG
because investors would draw their fund out of Asia including Indonesia to
America.
Somehow as time went by, anxiety over axing of stimulus
was subsiding. Released US economic data had in spite of betterments, some
factors were still below expectation, like unemployment which was expected to
be at 6.5% no only attained at 7% and inflation target was 2 percent against
the expected 2%.
Besides, some stockplayers believed that axing would not
be done this year, in line with succession of the Fed Governor in the near
future. Meanwhile, to look at index movement by sector, of the 9 sectors listed
at BEI only 3 sectors were moving positively, while an other 6 sectors stayed
negative. The consumers’ sector posted highest growth at 10.28% since closing
of last year till December 2013. The sector posting lowest downturn was mining
sector at 22.97%.
From
the above picture, IHSG till end of this year was projected to settle in the
range of 4,200 – 4,250 with tendency to inch up as foreign investors entered
during Christmas holidays and New Year 2014.
Business News - December 31, 2013
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