The Moneymarket
It never occurred to anyone that crisis in Greece
would drag France down the ravine of crisis. This would cause Rupiah value
against USD at the inter bank spot market Jakarta on Friday last weekend (7/12)
was predicted to weaken. One of the reasons was that the market was worried
about the recession signal from France.
Although the Bank of England (BoE) and Europe Central
Bank (ECB) had predicted to maintain their interest rate yesterday, the press
conference of ECB was not too heartening. Europe Central Bank underscored the
poor outlook of Europe’s economy in quarter IV-2012, therefore Rupiah tends to
weaken in the range of Rp 9,620 to Rp 9,660 per USD.
However data of unemployment in the USA was positive
enough to sustain performance of USD. Moreover the sentiment in Asia was still
negative with released Australia’s trade balance which was predicted to worsen
to the range of minus AUS 2.15 billion against the previous minus AUD 2.15
billion against the previous minus AUD 1.46 billion.
In Europe, the market saw the possibility of worsened
budgeting of the Government of France. The market was worried about the ability
of the French Government in axing their fiscal deficit of the Government in
axing their fiscal deficit to the ideal 3% of GDP. But target of the fiscal
deficit of the Government of France in 2012 was at the level of 4.5% against
5.2% in 2011.
The problem was, target attained or not, considering the
economy of France and hardly signaled any sign of growth in three latest quarter,
the situation was quite a suspense. Moreover the Central Bank of France had
signaled the threat of recession in that country.
In fact the market was quite optimistic about
liquidation of the next bailout fund for Greece as decided in the Euro Group
Meeting. This week, especially when the buy back plan for Greece bonds appeared
quite impressively in the market. The market was also quite sure that the Euro
zone would do anything to maintain Greece’s status as member of the Euro zone.
Moreover the Europe Central Bank (ECB) also maintained benchmark rate at 0.75%
last Thursday (6/12). The level was the lowest record as long as the region was
having financial crisis. ECB post posed further economic policy, waiting for
the right momentum to buy bonds.
RCB wished to keep benchmark rate low in Europe. The
objective was to down press soaring bonds returns of Uni Europe countries.
Although not bluntly stating to buy bonds of Spain’s Government, the decision
about interest rate was for the fifth time so the interest rate of fixed
deposit rose from 0,0% and emergency credit interest rate at 1.5%.
Somehow Rupiah weakening would not be to deep
considering that the market was still in wait-and-see position about the
released US payroll non-farm data. The figures were predicted as negative
because there was only an increase of 96 thousand or lower than the previously
publicized 171 thousand. If data of US nonfarm payrolls weakened it would make
the market to expect a more aggressive US monetary policy from the Fed during
this week’s meeting. (13/12)
As footnote, Rupiah exchange rate value against USD
during transaction on Thursday (6/12) was closed to weaken by 10 points to the
position of Rp 9,615/Rp 9,620. The market was hit by heightened sentiment from
Europe as Greece’s rating was axed, Finland under recess and economic outlook
was gloomy in England. Panic heightened as news spread out that France was on
the brink of recession.
Rupiah weakening was triggered by worsening sentiment
from Europe. Among them was bad news from Europe as Standard & Poor’s
rating agency demoted Greece rating from CCC to SB. This S&P rating
worsened sentiment as British Finance Minister George Osborne gave disclosed
unimpressive outlook of British Economy.
As for the year 2012 England’s economy was predicted
to contract by -0.1% for 2013: but the figure was lower than the previous
estimate of 0.8% for 2012 and 2% for 2013. British Finance Minister would also
postpone axing of fiscal deficit.
The condition was a hard blow to market sentiment. At
the same time Finland was the next country in the Euro zone which fell into the
recession cliff after market sentiment turned negative in two consecutive
quarters. In quarter III-2013 Finland’s GDP was minus 0.1% against the previous
quarter 1t 0.3%.
Besides, US data was positive enough to uplift
performance of USD. Index data of ISM Non Manufacturing (the service sector)
was positive enough at 54.7 against the previously published 54.2. The same was
with factory order which rose to become 0.8% against the predicted 0% and the
previous 4.5%. This was better than analyst and economist prediction but
weakening of Rupiah was accompanied by bettered sentiments in Asia especially
with New Zealand’s effort to hold their benchmark rate at 2.5%.
The same was with employment data of Australia which
turned better. Unemployment level in Australia fell from 5.4% to 5.2%. The
number of labor force in Australia also increased to 13,900 against the
previous 10,200 and of predicted 200 new workers.
One of the negative sentiments probably came from the
USA as President Barrack Obama signaled the difficulty to solve the fiscall
cliff which would accommodate Congress’s wishes in Washington. Therefore
negotiations over the fiscal cliff would continue till early next year so the
market was worried about the side effect. From the above picture, apparently this
week Rupiah value was predicted to fluctuate in the range of Rp 9,625 - Rp
9,655 per USD with tendency to weaken.
The Capital Market
The same was with Rupiah value which was under
pressure, the security exchange at home was under heavy pressure Index of IHSG
during early transaction last weekend (7/12) was opened to weaken. Lack of
positive sentiment which would move index was the catalysts.
During re-opening session IHSG weakened by 6.417
points (0.15%) to the level of 4,286.168. The same was with premium shares LQ
45 which dropped by 1.639 points (0.23%) to the level of 726.438. On that day IHSG
was predicted to move the mixed way as there was less positive sentiment strong
enough to jack up index. The span of BEI index was estimated to be at the level
of 4,275 - 4,325. Meanwhile downturn of economic projection of Uni Europe was
predicted to be negative sentiment especially to commodity-based sectors.
Meanwhile US stockmarket was closed stronger in spite
of weak opening after ECB lowered projection for Europe’s economic growth to
minus 0.5% in 2012, minus 0,3% in 2013 and minus 1,3% in 2014. The US stockmarket
was closed stronger in line with rebound of Apple Inc shares and release of
jobless claim data better than expectation. Price of oil was correction by 1.8%
to the level of USD 86.3 per barrel in line with lowered economic projection in
Uni Europe and followed by majority of world’s metal price. In Asia stockmarket,
transaction was opened slightly stronger thanks to positive sentiment and
release of US jobless claims initial data and anticipation of released
employment data of the USA.
Previously during transaction on Thursday (6/12) IHSG
was closed to inch up by 5.7 points or 0.1% to 4,292,60 Foreign investors were
having net sell of Rp 171.5 billion. Trade volume came to 6.1 billion worth Rp
6.2 trillion. 138 shares were notes to strengthen, 131 shares weakened and 104
shares were stationary. Index could not maintain significant strengthening due
to pressures toward end of session.
Index of JII rose by 0.1%, index of LQ45 premium
shares rose by 0.05%, index of ISSI rose by 0.35% and IDX30 dropped by 0.05%.
Strengthening of index was supported by share of the property sector 1.1%,
followed by shares of the consumer’s sectors 0.8% but strengthening process was
held back by the financial sector which weakened by 0.3% and shares of the
plantation sector 0.4%.
Foreign investors were in no condition to make
shareholders happy. Since early session they had taken the net buy position at
the regular market, but in the past few minutes were in the net sell position
although it was near closing session.
In fact there was nothing to worry about local stockmarket
index except for the impact of crisis in Europe which seemed never finished. It
seemed reasonable that IHSG during last week end (7/12) would test a resistance
level of 4,315 - 4,325. One thing most heartening was shares of the coal sector
which were closed positive.
Upon entering this week, IHSG was predicted to
continue technical rebound that occurred last weekend. At home, the market was
not trouble by big problem. Still the world was keeping watch on the global
factor in line with the fiscal cliff in America at year end and the debt crisis
in Europe.
In America, rejection of the Republic Party to
President Obama’s plan to increase tax of the rich had made the global and
regional stockmarkets to turn hectic. Index of Dow Jones and Nasdaq in Wall
Street which were the world’s reference again moved down by 0.11% and 0.18%.
Some analysts predicted the fall of Dow Jones and
Nasdaq indices would continue. The point was that the Republic Party had asked
Obama’s administration to axe state budget more to overcome fiscal cliff. John
Boehner, chairman of the Republic Party said that this way could save spending
up to USD 2.2 trillion. This figure was bigger that of tax income.
Boehner was probably right. The problem was that
austerity plan might drive America to deeper recession and the impact would be
felt all over the world. As known, America was the market for product of some
countries including Indonesia. If the recommendation of the Republic Party was
accepted. It was almost certain the domino effect would spread out worldwide.
However if America could find a solution to troubleshoot
their fiscal cliff problem, IHSG stand a change to overshoot the resistance
level of 4,350 and re open the potential to soar up to the highest level in
history. The resistance target was inclusive of window dressing effect. There
was indeed hope to reach 4,400. The only thing was, to consider the lurking
sentiments like the US fiscal cliff and New Year was just days ahead, it seemed
not easy to reach that level.
The point was that every at act of accumulated buying
of a certain blue chip share would be followed up by profit taking. This was
the factor that kept index from moving up faster. Therefore technical and
fundamental mix was important to be done to watch the course of a share.
However shares of the construction sector finally could keep index from sinking
any deeper. Besides, window dressing was something commonplace during year end
in the effort to lift up bargaining position in emitent’s performance so index
would remain to be high by end of year.
The only thing was that by early year it might happen
that profit taking might again prevail of the US fiscal cliff failed to find
evolutions. Therefore the January 2013 might always happen; investors were
taking stance to wait for third or fourth week of January 2013 to make a
bargaining position toward consolidating their portofolio.
Besides the fiscal cliff issue, labor union’s
demonstrations to demand increase in provincial minimum wages (UMP) might have
a negative impact on shares transaction at the stock market. Therefore this
week IHSG was predicted to move in the range of 4,275 - 4,325. Understandable
because shares of leading banks were being selling pressures as Bank Indonesia (BI)
lowered credit target of national banks this year. Second layer shares in the
mix-industry sector were also being avoided by investors.
Moreover shares of the CPO producers sector were predictably still be
under pressure as global demand had not turned normal and had the potential to
interrupt emitent’s performance. Price of CPO for contracts in January 2013
during transactions two weeks ago tend to be volatile. Closing price of CPO in
November 2012 was posted at USD 682 per ton, and yet only a week before it was
USD 703 per ton. The price was way below average price on year-to-date basis at
USD 829.62 per ton and the highest price level once reached USD 976 per ton.
Business News - December 12, 2012
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