The
Moneymarket
In Spite of the continuous
depreciation of Rupiah against USD, Bank Indonesia as monetary authority rated
such was something natural. BI had their commitment to always remain in the
foreign currency market in order to stabilize, because the market must be
balanced with inflow of foreign capital through investments. The amount of USD
in circulation was still in accordance with market demand and the underlying
economic condition.
So far the average exchange rate
value of Rupiah against USD was Rp 9,270 BI would maintain Rupiah exchange rate
value to keep it from fluctuating too much. Based on BI’s mid-rate (6/9) Rupiah
was seen to weaken to Rp 9,592 against the previous Rp 9,588 per USD.
Generally speaking market players
were today observing the development of potential deficit of Indonesia’s
current transaction as reference in doing transaction. If the threat could be
anticipated, most likely investor’s perception would be positive and inject
positive sentiment on Rupiah.
Marketplayers were also observing
economic growth for the future. It was expected that investment and export
could contribute to the pursuit of economic growth 2013 at 6.8%. But BI was
pessimistic that economic growth could be lifted any higher because the global
economic condition today was still signified by lessened demand in Europe. As
BI saw that export was still recovered, they projected Indonesia’s economic
growth in 2013 would only be 6.3% - 6.7% amidst optimism of a better global
economic prospect.
Somehow BI’s projection was
different from Government’s assumption in RAPBN State Budget 2013 of 6.8% due
to difference in time calculation based on the latest economic condition. It
was expected on the latest economic condition. It was expected that the
difference of assumption of macro assumptions between BI and that of the
Government would not ignite and debate among marketplayers as it might result
in varied economy.
It was noteworthy that Euro the
common currency once elevated by 3% of the highest level in two months against
USD after the President of Euro Central Bank Mario Dhargi announced to buy
bonds. 17 Euro zone member states maintained margin level against most of the 16
world currencies amidst ECB’s optimism that ECB would announce measures to be
taken to overcome debt crisis.
Meanwhile Australian USD was
exchanged at it lowest value level in more than 7 weeks before release of
report which showed increasing unemployment in August. The market responded
positively to ECB signal who planned to take significant measures. At least
Euro would settle at the present level or perhaps to inch up toward conducting
of ECB meeting.
The market was quite shocked to hear
announcement of the Central Board of Statistics (BPS) about the increases
prices of air transportation, tofu, and tempe which triggered inflation in the
month of August 2012 to the point of 0.95%. According to BPS the main uplifted
of consumers price index (IHK) in August was increased prices of transportation
and seasonal food during the fasting month, Lebaran and new school semester
year. The greatest contributor to inflation in August was food (0.35%) and
transportation, communication followed by financial services (0.23%).
The only thing was BPS did not worry
about inflation level of last August which was rated as relatively controllable
because it was only Slightly higher than inflation of August 2011 which was
0.93% based on inflation data of August, inflation of 2012 would not each 5%
because inflation rate in the ensuing month would be lower.
High import contributed to
downpressing of price at consumers’ level, especially due to up jump of import
from countries who treated Indonesia as an alternative export destination
country like China. Inflation of 2012 was projected to be only around 4.7% -
4.9% so BI rate was predicted to settle at 5.75% till end of year.
The market would also respond
positively to the development of Indonesia’s forex reserves by end of last
August which reached USD 109 billion. The figure was an increase of around USD
2.45 billion against that of end of July at USD 106.55 billion. Increase of
forex reserves was thanks to income from export especially oil an gas.
In addition to the above, increase
of forex reserves also originated from term deposit of foreign currency and
good sales of auction of Government bonds. Once Indonesia posted highest forex
reserves of USD 114.93 billion, but simultaneous with deficit of balance of
payment in quarter II, the position slumped. Downturn of forex reserves was
also the monetary cost of Government’s effort to protect Rupiah exchange rate
value which once crumbled.
It seemed reasonable that BI
projected Rupiah value against USD till end of 2012 to be in the range of Rp
9.200 – Rp 9.400 per USD. Among the reasons was that during the second half of
2012, deficit of current transaction would contract to only around 2% of GDP.
This estimate was based on the expectation that the global economic condition
and price of export commodity would be better, while being supported by the
BI’s policy and the Government.
The subsiding restlessness of the
global economy would pull inflow of foreign capital higher which would
eventually lift up surplus of capital and financial balance. In 2013 the
prospect of Rupiah value would still be influenced by the prospect of global
economy. Performance of current transaction was predictably better with support
of export performance although import was still high due to high domestic
demand.
Inflow of foreign capital especially
foreign direct investment (FDI) was expected to increase to sustain surplus of
capital and financial balance sheet. Based on performance of balance of
payment, BI projected Rupiah exchange rate value in 2013 would be in the range
of Rp 9,300 – Rp 9,500 per USD.
The prediction must be accompanied
by caution, including of the prolonged crisis in Europe and economic slowdown
in some partner states which might affect export performance. As for this week,
Rupiah exchange rate value was predicted to move in the range of Rp 9,565 – Rp
9,615 per USD with a tendency to inch up.
The
Capital Market
During closing session last Thursday
(6/9), index of IHSG strengthened by 27.505 points or 0.67% to the level of
4,084,836 cheered by the Asian stockmarket. During closing of session 1, IHSG
strengthened by 14.770 points (0.36%) to the level of 4,090.122 Meanwhile index
of LQ45 rose by 3.393 points (0.49%) to the level of 701.174 Increase of this
index of ECB meeting in troubleshooting debt crisis.
And yet during the last session on
Monday early last week (3/9) IHSG was closed to rise by 57.617 points (1.42%)
to the level of 4,177,948 Meanwhile index of LQ rose by 11.201 points to the
level of 706.733 Strengthening of IHSG was driven by buying spree of shares
which were cheap. Index managed to break through the psychological level of
4,100.
Again foreign investors were
accumulating shares. Local investors were not less passionate to chase shares
which were already cheap. Nine shares managed to strengthen, being driven by
the buying spree; only one sector was still under pressure, i.e. agriculture
the consumer’s sector took the lead in the strengthening process.
In other part of the world, (6/9)
shares in Wall street were going by leaps and bound, breaking through the
highest level since the fall of Lehman Brothers which ignited the crisis of
2008. The strengthening was triggered by the plan to but promissory notes in
Europe by the European Central Bank (ECB).
The President of ECB Mario Draghi
had kept his promise of last July to do anything he could to troubleshoot debt
crisis in Europe. The Europe Central Bank intended to buy bonds without limit
in order to save crisis-entangled European states.
This ECB plan, which was not
approved by Brundesbank from Germany planned to buy promissory notes and keep
them for a period of three years, naturally by mandate of ECB. ECB also planned
to maintain interest level at lowest level of 0.75% to tame inflation as well
as to ease credit cost.
Index of Dow Jones jumped up by
244.52 points (1.87%) to the level of 13.292.00 Index of Standard & Poor’s
500 jumped to the level of 1.432.12, the highest position since May 2008,
before the global financial crisis swept the earth. Index of Composite Nasdaq
skyrocketed by 65.12 points (2.12%) to the level of 8,134.39.
The upjump of index of Dow Jones was
triggered by the plan to buy promissory notes in European states by ECB and
positive sentiment from data of America’s economy which exceeded expectations,
i.e. in the service sector and number of employments.
Movement of index at the global and
local stockmarket in the last few months were much influenced by news from
Europe. Responding to this, index of S&P had risen by 8% since early July.
Meanwhile Asian stockmarkets were open to rise and indicated that index serving
as regional reference would book the biggest increase in the past one month.
Bloomberg reported that upturn of
the regional shares was in line with ECB’s decision to give room to unlimited
bond buying. According to analysts, bond buying plan by ECB was a long term
measure to find solution to crisis. The plan was rated as having the potential
to minimize continued risk in Europe. They stressed there was no dount about
it.
Nearly all stock markets in Asia
were already opened last Friday (7/9) after the US stockmarket was closed to be
appreciated. Nikkei 225 in Japan rose by 1.89% to the level of 8,844,57; index
of Tai-ex in Taiwan rose by by 1.32% to the level of 7,423.19. Index of Kospi
at the South Korea stockmarket jumped by 2.13% to the level of 1.921.23. Index
of S&P/ASZ at the Australian stockmarket inched up by 0.57% to the level of
4,337.5. Index of Straits Times in Singapore also inched up by 0.87% to the
level of 3,015.4. Not less notable FTSE KLCI in Malaysia inch up by 0.16% to
1,620.62. Furthermore index of NZX in New Zealand also rose by 1.19% to the
level of 3,737.4.
Business News - September 12, 2012
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