The
analytic headline of early this week as written above was not without
intention. Considering the heavy pressures of increased import and declining
export, Bank Indonesia felt it necessary to lower Rupiah exchange rate value to
a certain level. The intention was to put brakes on import and to jack up
export. Meanwhile the stockmarket was showing signals of invigorating in line
with the release of eminent report of the third phase which was to terminate
on September 30 last.
At
least Bank Indonesia’s objectives was met when last Thursday [4/10] triggered
by investors’ selling spree Rupiah was sold at inter-bank transactions to
strengthen by 10 point to the level of Rp 9,595 against the previous position
USD 9,605 per USD. Even technically USD value which was high enough stimulated
selling action of USD enable Rupiah to strengthen.
Moreover
Europe’s Central Bank would run a meeting might lead the way to stimulating
including to axe bank interest which would lead to risky exchange rate value.
At home in Indonesia forex reserves was considerably high, i.e. USD 110. 172
billion as per September 28, 2012 which might lead BI to adopt more policies to
protect Rupiah exchange rate value against USD?
The
potential of Rupiah strengthening was notably great, because a forex reserve
was plentiful. Till end of this year, moderately rupiah was predicted to float
at the level of Rp 9,450 per USD. Meanwhile trade balance which had been noted
as deficit in the past four months was gaining energy and started to score
surplus of USD 246.5 million.
One
thing notable was Rupiah inching up sluggishly due to monotonous trading
atmosphere and no notable outburst at home. In the external, Australian Dollar
once slumped in line with the slump of retail sales, although it managed to
bounch back on short term trading on Australian dollar and this caused Rupiah
to move flat.
On
the other hand people were waiting for the meeting of financial ministries of
Uni Europe this week, but many people were not over expectant of the condition
of Europe because the conflict was greater than the effort to find solution.
Dissenting opinion arose between German Central Bank; the topic of debate was
whether the European Stability Mechanism [ESM] was legal or illegal and yet
Germany’s Kanselir had signed it.
Meanwhile
in terms of US data, although it did not show any significant growth, stability
was felt at the lower level. Only thing was that even at the low level the US economy
was not sinking.. apparently Initial Jobless Claims was predicted to worsen to
become 359 thousand against the previous 370 thousand; meaning more people
claimed to be jobless.
Theoretically,
in the short term, the negative data strengthened USD value, because America is
the world’s economic locomotive. If the locomotive broke down, the whole world’
economy break down. Of two evils choose the less, and USD is the best of the
worst.
All
in all, USD was stable against most of the leading currencies especially
against Euro at 79.760 But later on USD weakened against Euro to the level of
USD 1.2940 against the previous USD 1.2905 per Euro.
At
home in Indonesia, BI would take several measures to reduce deficit in current
transaction by allowing some room for weakening of Rupiah but measurably. With
Rupiah depreciation, import was controllable while export was more or less
assisted. However, BI would still maks sure that Rupiah remained stable and not
restless.
Beside
the above steps, BI continued to step up monetary interventions to ensure
Rupiah stability and controlling liquidity. BI was expecting that their action
was not interpreted as tight money policy, because BI benchmark rate was
maintained to stay at 5.75%, the monetary corridor at the lower level being
narrowed down by increasing deposit facility by 25 bps from 3.75% to 4,00%.
Other
policies were to enhance deepening of the foreign currency market to support
rupiah stabilization by relaxing tenure forward of non residence from the
previous minimum 3 months to become minimum one week. All the policies were
meant to enable investors to do hedging of their investments in Indonesia. BI
was also planning to take follow up steps in regard to Export Yield Forex [DHE]
including development of Trustee functions in the banking sector.
In
addition to the above, BI adopted the macro-prudential policy to manage credit
development and keep it from excessive growth especially for the automotive,
property and credit card center. BI would also take steps to strengthen implementation
of the Loan-to Value [LTV] policy including enhancement of Syariah-based industry and
prohibition of Credit without-guarantee [KTA] for credit down payment.
Beside
the monetary policy, BI also coordinated with the Government to take measures
in controlling deficit in current transaction as known, deficit in Indonesia’s
Current Transaction [NPI] until Quarter II 2012 swelled from USD 3.2 billion
[1.5% of GDP] in quarter I to USD 6.9 million [3.1% of GDP].
It
was noteworthy that the Board of Statistics [BPS] noted inflation in September
2012 to be only 0.01% as prices were descending. The greatest contributor to
inflation was garment group which reached 1.47% and also education, recreation
and sports 1.07%. Meanwhile food was the greatest contributor to deflation,
i.e. -0.9% followed by transportation, services and the financial sector -0.8%.
the food category was still satisfactory and therefore contributive to
deflation.
Therefore,
inflation rate of calendar year January-September 2011 was noted at 3.7% and
year-on-year inflation was 4.31%. inflation of core inflation y.o.y 4.12%.
Meanwhile records of 66 cities were having deflation. Pangkal Pinang posted
highest inflation i.e. 0.47% followed by Padang 0.54% and Dumai 0.01%
Meanwhile
the city posting highest inflation was Singkawang -2.18% and Palu -2%.
Inflation in September 2012 was the lowest in the same month was posted at
0.8%, in September 2009 reached 1.65%. Meanwhile in September 2010 inflation
reached 0.44% and in September 2011 0.27%.
On
the other hand Indonesia’s export in August 2012 reached USD 14.12 billion or
down by 12.27% compared to export in July 2012 amounting to USD 16.09 billion.
Meanwhile compared to August 2011 down to 24.30%. downturn of export in August
2012 happened in the oil-gas dropped by 2.3% from USD 2.92 billion to USD 2.85
billion. Meanwhile export of non oil-gas dropped by 14.49% from USD 13.17
billion to come USD 11.26 billion.
Downturn
in oil-gas export was due to slump of export by 38.12% to become USD 220.5
million and export of gas which dropped by 3.19% to become USD 1.66 billion.
Meanwhile downturn of non pil-gas export through August 2012 was triggered by
downturn of prices of fat and animal/vegetable oil amounting to USD 1.59
billion, followed by downturn in prices of rubber and rubber goods from USD 892
million to become USD 795 million.
Accumulatively
through January – August 2012, Indonesia’s export value was also having
downturn of 5.58% from USD 134.68 billion to become only USD 127.17 billion.
Over the first 8 months of 2012, export value was still dominated by mineral
fuel which reached USD 17.83 billion, followed by fat and animal/vegetable oil
USD 14.09 billion.
In
spite of downturn in export, particularly non oil-gas products due to crisis in
Europe, demand for textile commodities remained high, especially in the USA.
Other export commodities which were high and remained high were rubber and
rubber products.
Based
on destination country, accumulatively through January – August Indonesia’s
export of non oil gas products were for the most part still to China which
reached USD 13.37 billion. Total market share of non oil products to the three
countries came to 35.42% of total national exports amounted to USD 101.213
billion.
Meanwhile
export of non oil-gas products to ASEAN states came to USD 25.6 billion,
contributing around 25% of non oil-gas exports. Export were mainly addressed to
three countries: Singapore, Malaysia and Thailand. Meanwhile export of non oil
– gas products to Uni
Europe were mostly to Germany which reached USD 2.08 billion, followed by
England USD 1.16 billion and France USD 774 million.
On
the other hand, the Central Board of Statistics [BPS] noted Indonesia’s export
on August 2012 reached USD 13.87 billion or down by 15.21% against import of
July 2012 amounting to USD 16.35 billion.
Although
import of oil gas was increasing by 19.97% due to increased in import of crude
oil and oil-products, downturn of non oil-gas import brought total import to
low level compared to previous period. Because of import downturn in August
2012, for the first time in the past 3 months Indonesia was posting trade
surplus.
The
downturn of import came as a surprise, especially import of raw materials and
auxiliary materials. In the near future, a chance of import down turning was
still open but to what degree the downturn was still a question.
In
August 2012 last, trade balance posted surplus of USD 248.5 million
accumulatively of January – August 2012 reaching USD 496.7 million. In August
2012 Indonesia’s export was posted at 14.2 billion and import USD 13.87 billion
which resulted in surplus of around USD 248.5 million. Accumulatively through
January - August 2012 Indonesia’s export
value reached USD 127.27 billion while import was posted at USD 126.62 billion,
resulting in surplus of USD 496.7 million. By the above picture, Rupiah was
predicted to fluctuate in the range of Rp 9,569 - Rp 9,600 as an “ideal” range.
The
Capital Market
Last
Thursday [4/10] index of IHSG ascended again to break its highest record in
history at the position of 4,271. Again investors go for shares which pushed
index up. Buying by investors was still limited since the condition in the Euro
zone was still unclear. Whether Spain would call out for bail out or not was
still unclear.
One
thing was sure IHSG strengthened by 19,950 points or 0.47% to become 4,271,461.
Meanwhile index of LQ45 rose by 5.727 points or 0.78% to become 736.370. Nearly
all sectors strengthened except agriculture, minery, infra structure and
trading. Foreign investors were making clean net buy of Rp 315.18 billion.
Total transaction was posted at Rp 4.13 trillion.
Meanwhile
Asian stockmarkets were
closing trading the varied way. The stockmarket in
China was still on vacation in line with public holiday. Index of Hang Seng
inched up by 19.67 points or 0.09% to become 20,907.95. Index of Nikkei
Strengthened by 77.72 points or 0.89% to become 8,824.59. Index of KOSPI
slumped by 3.35 points or 0.17% to the level of 1,992.68.
Index
of IHSG failed to surpass the highest record of 4,272 last September. The
highest level reached was 4,275 and the lowest was 4,248,51 Shares of the
industrial sector was still sustainer of index strengthening, rising by 4.04%
followed by shares of manufacturing sector 1.6%. Meanwhile shares of the mining
sector took the lead in weakening by 0.6%; generally speaking shares of the
commodity sector were still under pressure. On the over all, shares of the
construction, cement, property and automotive sectors were showing potential of
significant growth. What was needed now was extra energy from the banking and
consumers sectors to lead IHSG to attain target of 4,400 – 4,800.
Soon
when the resistance level of IHSG at 4,272 could be broken through IHSG might
be expected to soar up to 4,400 – 4,800 or at least 4,300 – 4,350. The local
stock market stand a change to strengthen, being stimulated by positive
regional sentiment. Broadly speaking, index was still in the span of consolidation
so the range of movement was still limited as there was no signal of being
bullish. Shares of the construction and consumers sectors were expected to move
on the green lane.
Previously
the US stockmarkets was closed positive, being supported by economic data which
was better than expected however anxiety over weakening of global economy was
still an obstacle to index increase. Index of Dow Jones rose by 12.25 points or
0.09%, index of S&P 500 inched up by 0.36% while Nasdaq rose by 0.49%. The
Europe stockmarket was closed in diversity after Spain’s prime Minister denied
he would plead for bail out. Index of FTSE inched up by 0.28%, index of CAC
slumped by 0.24% while index of DAX inched up by 0.22%.
This
week, positive sentiment from US economic data would bring positive impact on
IHSG. Release of the US employment data, as expected would make the US
stockmarket again to rebound and generate positive impact on IHSG. The rebound of
crude palm oil was predicted to make shares of the sector to have “technical
rebound” after weakening significantly.
Business News - October 10, 2012
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