The Moneymarket
Rupiah exchange rate value against USD last Thursday
(12/7) was closed to weaken by 30 pints (0.31%) to the level of Rp 9,440/Rp
9,450 against the previous position of Rp 9,410 – Rp 9,420. Weakening of Rupiah
was on account of negative external sentiment where there was mounting anxiety
of global economic slowdown. The sentiment was triggered by release of minutes
of The Federal Open Market Committee (FOMC) which stated that the Fed had
slashed America’s growth percentage for 2012.
Assumption of America’s GDP was lowered to the level of
1.9% to 2.4% against the previous target of 2.4% to 2.9% for 2012. Consequently
Rupiah reached its lowest position of Rp 9,480 and strongest level of Rp 9,430
per USD.
At the same time Bank of Japan (BoJ) also slashed
economic growth rate of Japan. Assumption of Japan’s GDP was also slashed to
become 2.1% for 2012 against the previous assumption of 2.3%. The same was with
Bank Indonesia who slashed Indonesia’s economic growth rate from the range of
6.3% - 6.7% to the level of 6.1% - 6.5% for 2012.
Furthermore Rupiah was also having negative pressures
from lowered interest rate by the Bank of Central Korea and Brazil who also
expressed investor’s anxiety over the present global economic condition. The
South Korea Central Bank lowered their interest rate by 0.25% to the level of
3%, while the Central Bank of Brazil lowered their benchmark rate by 0.50% to
the position of 8%.
Anxiety over adverse condition in Europe also worsened as
Italian Prime Minister stated the possibility of Italy needing bail out at
unpredictable time. Global economic condition was getting less favorable as
economic data released by Australia also made sentiments worse.
Unemployment level in Australia rose to the level of 5.2%
for June 2012 against the previous 5.1%. All the negative sentiments
strengthened position of USD and posed as pressure on rival currencies
particularly those in Asia including Rupiah.
All in all Rupiah strengthened against main currencies
including Euro. Index of USD strengthened to 832,589 against the previous
83.568. Against Euro USD strengthened to USD 1,2211 against the previous
position of USD 1,2236 per Euro.
Bank Indonesia noted that accumulatively Rupiah exchange
rate value in Quarter II-2012 was still depreciated. However BI assured that
the depreciation was still within controllable volatility compared to previous
quarter. According to BI Governor Darmin Nasution, that Rupiah was under
control was thanks to stabilization policy adopted by BI.
On point-to-point basis Rupiah weakened by 2.65% (q to q)
to the level of Rp 9,393 per USD or weakening by 2.17% (q to q) on the average
to become Rp 9.277 by end of June 2012. Pressures on Rupiah was caused by
crisis in Europe which increased demand for USD as related to rebalancing of
portfolio by non-residential players. Besides, demand for USD at home also
increased due to increased import.
In this case BI continued to take measures to maintain
balance of foreign currency market or development balance of foreign currency
market or development of foreign currency as instrument to fundamentally
stabilize Rupiah value in line with moving curveline of currencies of the Asian
region.
Only trouble was, BI had to slash Indonesia’s growth
projection from the previous 6.3% - 6.7% to become 6.1% - 6.5% in line with
worsening global economic condition. With declining export, economic growth by quarter
III-2012 was estimated to be 6.1% - 6.5% or in the range of 6.1% - 6.5% in the
entire year 2012.
It was only reasonable for BI to be on the alert of
global economic trends which were signified by notable downturns and
uncertainty; crisis in Europe might need a long time to recover in spite of
signals of progress from the European Union Summit sometime ago.
Weakening of global economy had its negative impact on
growth of Asian states like China and India who were Indonesia’s trading
partners. Meanwhile prices of global commodities including prices of imported
goods continued to drop in line with lessened global demand.
Somehow BI signaled that Indonesia’s economy would remain
strong thanks to domestic demand whether consumption or investment which were
satisfactorily growing. All sectors were predictably growing well. The sectors
which were expected to be the propeller of economic growth were among others:
transportation and communication, trading, hotel and restaurants, and industry.
Revision of economic growth projection by BI was rated as
natural but a little ambitious, because by maintaining growth rate above 6,5%
was rated as unrealistic to consider that many other countries were slashing
their growth projections percentage in large magnitude.
China whose growth target last year was still 9.5%, this
year set target at only 7.5%. Meanwhile China’s growth performance in quarter I
of 2012 was 8.1%. India was even worse, in quarter 1-2012 only grew by 5.1% and
inflation was 10.4%. If China and India – who used to have high growth record
had to be severely corrected this year, it was completely not sensible for
Indonesia to set target growth higher than last year’s 6.5%.
Many analysts and economists estimated Indonesia’s growth
this year would be much lower than expectation, in the range of 6.0% - 6.3%.
The principle was: as long as growth was 6% it was good enough.
Based on BI’s mid-rate last weekend, Rupiah was traded at
the level of Rp 9,403 per USD or weakening by Rp 20 against the day before at
Rp 9,383 per USD. To consider BI’s policy which maintained BI rate at 5.75%,
Rupiah weakening could be kept from falling any further so it was reasonable if
there was room for Rupiah to strengthen this week in the range of Rp 9,375 – Rp
9,450 per USD.
BI was suspected to tightly safeguard Rupiah value by
making intervention at the moneymarket. This was indicated by the position of
forex reserves which shrunk to the level of USD 106.5 billion by end of June
from USD 111.53 billion by end of May 2012. The amount of forex reserves was
still sufficient to finance five months of import and paying Government’s
overseas debt. The figure was stipulated by the International Monetary Fund
(IMF) who stipulated that forex reserves must be at least enough for financing
three months import and paying Government’s overseas debt. Besides BI’s
intervention at the moneymarket, lessened forex reserves was also caused by
export value which was showing downturn in the past few months.
The Capital Market
Index of IHSG last Thursday (12/7) dropped by 35 points
following acts of profit taking by foreign investors. Many of foreign commodity
shares were released by foreign investors. IHSG was closed to fall by 35.013
points (0.88%) to the level of 3,984.120 Meanwhile index of LQ45 was closed to weaken
by 8.210 point (1.20%) to the level of 680.861 while index of Jll fell by 1.5%.
Downturn of index was triggered by shares of the mining
sector which dropped by 2.2%, followed by shares of the industrial sector 1.8%
and shared of the basic industry sector 1,7%. Strengthening was only in the
infra structure sector 0.07%.
Meanwhile shares of the Wall Street stock-maeket ended
weak on account of warning that there would be slowdown in performance of
technology-based existents, rally of shares of Proctle and Gambler served as
supporter to Dow Jones.
Index of Dow Jones weakened by 31,16 points (0.25%) to
the level of 12,573.27. Index of Standard & poor’s 500 dropped by 6,69
points to the level of 1,334.76 Index of Composite Nasdaq lost 21.79 points (0.75%)
to the level of 2,866.19.
Meanwhile movement in the regional stockmarkets were
varied: index of Nikkei inched up by 8.01 points (0,09%) to the level of
8,728.02 and index of KOSPI strengthened by 4.64 point (0.26%) to the level of
1,790.03 while index of Hang Seng (HIS) dropped by 1,9%, index of Nikkei
slumped by 14%, index of STI inched down by 0.4%, index of Shanghai dropped by
0.4% and index of ASX inched down by 0.7%.
Some central banks in Asia had become focus of attention
with policy of the Bank of Japan and Bank of Korea today. The Bank of Japan, as
it was impossible for them to change their interest rate which was already too
low, would consider whether they should expand their asset buying program.
Toward decision making, financial shares registered in
Tokyo slumped. Nomura Holdings Inc dropped by 1.1%, Aozora Bank Ltd dropped by
1.6% and Mizuho Financial Group Inc lost 0.8%. Shares of leading exporters also
slumped, including that of Renesas Electronic Corp while Sharp Corp lost 2.3% and
Mazda Motor Co dropped by 1%.
Hitachi Construction machinery was in counter-trend
motion by rising at 1% after Nikkei reported operational profit for April-June
period and was predicted to soar up following sales to America which showed
positive trend.
Shares of the banking and property sectors also weakened
with Industrial Commercial Bank of China Ltd losing 1%, China Merchant Bank
slumped by 2.2%, Agile Property holdings Ltd fell by 2% and New World
Development Co dripped by 1.4%.
Casino centers and luxuries goods were also part of the
downturning trend sich as SpA 4.5%, Wynn Macau Ltd which fell by 2.5% and
Galaxy Entertainment Corp which weakened by 2.3%. Meanwhile increase of index
in exporter companies made South Korean shares to strengthen, like LG Display
Co which jumped up by 3.1% and LG Electronics which rose by 1%.
Shares of Hyundai Motor Co. sunk by 0.2% while KIA
Motores Corp inched up by 0.8% after wages dispute triggered their first act
laborer’s strike.
In Australia, rally of oil price contributed to increase
in energy shares. Oil Search Ltd rose by 1.6% and shares of Woodside Petroleum
Ltd rose by 0.9%.
In Sydney stockmarket, Textra Corp. rose by 0.7% after
Australia Telecommunication sold their subsidiary company Telstar Clear to
Wodafone Zealand at nearly USD 670 million.
In Indonesia, IHSG was continuously under pressure over
the sessions in line with the regional market. Previously IHSG had reached the
level below 3.975. This was triggered by commodity prices which was visible in
the share of the banking sector which sunk deeply. Asian stockmarkets also
weakened, being triggered by downturn of commodity price and downturn of
employment data in Australia.
The Europe stockmarket during sessions on Friday last
weekend (13.7) had higher potentials. This was in line Asian stockmarket after
data of China’s GDP came up as estimated. China’s economic growth dropped for
the period of April-June to become 7.6%, the lowest level in the past three
years, while production of the manufacturing sector dropped to 9.5% in June
against 9.6% in May.
Such was a signal to the Government of China to follow up
their monetary policy and increase investments, whereby their economic growth
would be well maintained over the second semester this year.
At the same time, investors were waiting for the outcome
of auction of bonds by the Italian Government. This auction took place after
Moody’s Investors Service demoted Italy’s debt rating from A3 to Baa2 as they
felt sure that Italy would be infected by the crisis in Greece and Spain. The
were undergoing increased return of bonds as their economic prospect was fading
out.
Weakening of the global and regional stockmarket was
triggred by disappointment over further easing by the US Federal Reserves which
eroded confidence all over the place due to “unclear” OE3 which had its
negative impact on the global market.
Lack of clarification by the Fed about further easing
made most of the index of global shares to weaken last week and to continue
this week. Analysts rated that today the Fed was being controlled to maintain
status quo and monitor economic progress.
This week there was one factor which had the potential to
serve as positive sentiment to the local stockmarket in Indonesia, i.e.
decision of the Regional Development Bank of East Java Tbk which posted
premiere share at the Indonesia Security Exchange (BEI) as 13th
eminent with share code BJTM last Thursday (12/7).
Companies of the banking sector offered 2,8 billion
shares to the public with price of premiere share Rp 30 per share and nominal
value of Rp 250 per share. Total amount obtained from IPO of premiere share was
Rp 1.28 trillion.
Market capitalization was posted at Rp 6,35 trillion.
During IPO demand was 3,73 million shares posting 4,411 buyers. The number of
shareholders increased to 4,381 through IPO.
The percentage of public shares was 17.87% after offering
of premiere shares and ESA and MESOP programs. The average PER industry was
10.86 times and average PBV was 1.83 times on July 11, 2012.
Other positive sentiment came from BI’s step to maintain
BI benchmark rate at 5.75% which was rated to have neutral impact on the
property shares sector. As known, growth of property was related to interest
rate level of banks. With BI rate being settled at 5.75%, it would motivate
investors to shift investment to the property sector. Moreover portfolio
investment was now in high volatility so as a whole, growth of the property
sector would still be prospective till end of 2012.
By BEI data, by year-to-date index of shares of the
property sector was the sectored index which rose highest compared to other
sectors, posting an increase of 21.33% to the level of 278.16 points. This was
the positive sentiment which was predictably supportive to IGHG movement this
week in the range of 3,990 – 4,075 with the tendency of limited strengthening.
Business News - July 20, 2012
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