Thursday, 11 October 2012


The Moneymarket

In post Idul Fitri days, the external (global) factors was still overshadowing Rupiah curveline and local stockmarket index this week During early session on Friday last weekend (24/8) Rupiah exchange rate value was still motionless in the position of Rp 9,485 per USD. Previously Rupiah value against USD was closed to strengthen to the position of Rp 9,485 per USD (23/8) against the previous Rp 9,510 per USD.

Index of Bloomberg foreign currency showed that USD weakened against Asia’s main currencies except New Zealand’s Dollar, Australian dollar, Indian Rupee and Japanese Yen which were affected by deficit of trade balance and inched up by 0.03% to the level of 78.56 per USD. Meanwhile Rupiah was fortunate to have the blissful impact of stimulus regulation exercised by the Fed and inched up by 0.18% to the level of Rp 9,488 per USD.

Bank Indonesia was spontaneously on the alert in the market and was seen to make market intervention to maintain Rupiah stability. Outcome of the Federal Open Market Committee Meeting (FOMC) sparked a little hope for the Fed to launch OE3 which signaled Rupiah exhalation. BI was predicted to try to calm down Rupiah fluctuation amides readiness to supply USD in the market to meet the demand of USD by importers each time by end of the month.

Meanwhile Euro exchange rate value floated at above USD 1.25 on Wednesday (22/8) for the first time since early July. Euro exchange rate strengthened, driven by outcome of the Fed’s last meeting which signaled that the Central Bank would inject new stimulus. Euro was in the position of USD 1.2522, an increase against USD 1.2470.

Somehow Euro once fell against Japanese Yen to the level of 98.34 yen against the previous 98.84 yen. USD also weakened against ¥ slipping down to ¥ 78.53 against the previous ¥ 97.27. USD also weakened against Swiss Franc from the previous 0.9628 Franc. Greenback also fell against British Poundsterling which was traded at USD 1.5878 against the previous USD 1.5786 the day before.

Euro was under pressure when word was out that European leaders must anticipate the possibility of the Euro zone breaking up. This was the message of Finland’s Prime Minister Errki Tuomioja as released by the Daily Telegraph on Friday August 17, 2012. Tuomioja said that the Government of Finland was ready to face reality in case the Euro currency broke down with “an operational plan to face any condition” This agenda was not initiated by Finland. “But we must be ready. The Government of Finland have a set of plan if anything bad happens; But it seems that there was a consensus that a case like the Euro zone breaking up would be extremely costly for the short term or medium term, more costly than the effort to troubleshoot the crisis irself”.

Finland had the right of Veto to reject any agenda that proposed bail out for any European state. Now Europe had to solve debt crisis faced by their member countries which eventually leads to budget tightening. However this budget tightening was criticized by many circles including George Soros who said that any austerity plan would slow down economic growth and eventually make crisis even worse.

From the above picture it was clear that the future faith of Rupiah would still be under external pressure in the range of Rp 9,475 to Rp 9,525 per USD. External factors were still more prevalent compared to internal factors as clearly visible in the nation’s fundamental economy.

The Capital Market

Meanwhile index of IHSG inched down by 11.341 point or 0.27% to the level of 4,251.318. Index of LQ45 also inched flown by 2.340 points (0.33%) to the level of 715.778. The cause was negative sentiment from the Asian market on account of global sentiment. This was downpressed by selling spree of premium shares.

And yet during opening session last weekend (24/8) IHSG had lessened by 21.137 points (0.51%) to the level of 4,141.522 being affected by negative sentiment from the global market. Fading hope for stimulus coming from Federal Reserve was overshadowing market pulsation.

Players of the regional market were getting more cautious about declining world’s economy. The point was that China’s economy was losing steam and so was that of Uni Europe. Apparently indices never touched the positive territory at all. Selling spree that never ceased drove index to plunge to the lowest level at 4,125,260.

Commodity-based premium shares which once soared up being uplifted by increased commodity prices were now starting to become subject to selling spree. Selective buying crept over second layer shares. Regional stockmarkets were still weakening due to negative sentiment of the global market. The stockmarket of Hong Kong and China fell by more than one percent.

The Situation at Asian Stockmarkets by noon Last Week (14/8).

Index of Composite Shanghai weakened by 15.26 points (0.72%) to the level of 2,097.81. Index of Hang Seng dropped by 228.16 points to the level of 19,904.08 Index of Nikkei sank by 106.46 points (1.16%) to the level of 9,071.66 Index of Straits Times fell by 6.32 points (0.21%) to the level of 3,050.05.

At the New York stockmarket, wall street was corrected due to fading hope that the Federal Reserve would move fast to inject additional stimulus to market. In addition to that, economic data of China and Uni Europe showed how stagnant global economy was. Ten leading industrial sectors in S&P index were closed at negative territory, led by the material sector which fell by more than 1.7% The falling shares of Hewlett & Packard also posed as burden, but index of S&P 500 still managed to hold on at the psychological level of 1,400.

Investors still predicted additional stimulus from The Fed, especially with the slowing down of America’s economy as seen from the reported data of the local Government. But President of the Fed of St Louis branch, James Bullard said that the latest economic cata being dissected by the Central Bank was blinking signals of economic recovery.

During closing session on Thursday (23/8) index of Dow Jones dropped by 115.30 point (0.88%) to the level of 13,057.46 Index of Standard & Poor 500 weakened by 11.41 points (0.81%) to the level of 1,402.08 Index of Composite Nasdaq dropped by 20.27 points (0.66%) to the level of 3,053.40.

Although certainty of Quantitative Easing (QE) realization was still miles away, investors were over expectant and optimistic and such had jacked up index. The Europe stockmarket which were vigorous during opening session on Thursday (23/8) was the proof of iit. Asian stockmarket was even bolstered up in the past two weeks. The trigger was hope for liquidity injection of the third phase. Although Quantitative easing was part of the speech of The Fed’s Governor Ben Bernanke at Jackson Hole, no one could really be sure what was going to happen next.

Back to the local BEI Indonesia Security Exchange Market; index was fluctuative, hopping thinly between red and green zone. Buying spree was not too overwhelming, some investors were still on vacation so the marketplace was not too merry today. Index moved back and forth between green and red, somehow gradually index managed to drift back to the green zone thanks to act of selective buying.

Still in the mood of long Lebaran holiday, foreign investors were making the best of the moment by buying shares. Meanwhile local investors were still on holiday. The high price of commodities had uplifted commodity based shares high enough; meanwhile selling spree was still happening in industry-based shares.

Shares of the banking sector was projected to be convincing in Semester II this year. This was thanks to performance of the banking industry which grew quite satisfactorily in Semester I-2012. Apparently profit of the banking sector was notably growing thanks to progress in credit pipelining.

The condition indicated that Bank Indonesia’s regulation which increased minimum amount of Down Payment for Credit of Automotive and Mortgage (KPR) was rated as having no significant impact on the performance of industry. It was believed that the condition would make investor’s trust in the banking sector remain high in the future, especially in case of first layer shares or premium shares.

Besides, economic data was also rated as satisfactory in Semester II this year as one of the propelling factors of industry performance. Particularly in terms of first strata shares, and shares of the banking sector were dependent on foreign fund that entered the capital market. Besides shares of the banking sector, shares of the commodity sector were also noteworthy. The high price of commodity succeeded in uplifting commode based shares to considerable high level. Meanwhile shares based on various industry tend to be avoided.

All in all this week index of BEI was projected to move in the range of 4,145 – 4,175 with the tendency to strengthen at limited pace.

Business News - August 29, 2012

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