About which factor was more
influential to the stockmarket the Jokowi factor or Janet Yellen factor was
still a question, but no doubt they would be the influential factors on IHSG
course over the week.
Last week, Rupiah and IHSG
were moving in parallel, strengthening till end of last week [4/4] when it
stagnated. This week, by considering national holiday on Wednesday [2/4] due to
General Election, most probably trade volume would contract with effect on
Rupiah and IHSG which tend to consolidate.
The Moneymarket
Rupiah was transacted in
interbank transaction in Jakarta on Thursday afternoon [3/4] strengthening by
two points to become Rp11,293 against the previous Rp11,295 per USD. Rupiah was
stabilizing as foreign investors still enter the domestic moneymarket.
Entry of foreign capital
jacked up demand for Rupiah so Rupiah was still appreciated although still at
limited level in line data expectation of US economy which was still positive.
The USD was still in the process of strengthening due to positive economic
data.
Players of the moneymarket
were monitoring data of the Automatic Data Processing [ADP] which released
employment data and orders of America's factory which signaled economic
betterment. A condition as such could strengthen USD appeal and might edge
Rupiah. Fortunately Rupiah was still buoyed by optimism about election this year
that it would meet market's expectation. Investors were enthusiastically
looking forward to the outcome of Legislative election.
During initial session last
weekend [4/4] Rupiah at inter-bank transaction in Jakarta was still slow
moving around Rp11,296 per USD. It was expected that Rupiah would strengthen
in the range of Rp11,250 - Rp11,275 per USD at closing session. Meanwhile
Rupiah mid-rate was set to stagnate. BI's data had it that Rupiah mid rate was
set Rp11,310 per USD the same as on Thursday [3/4] at Rp11,303 per USD.
According to Bloomberg
Dollar Index, Rupiah inched up by 0.1% to the level of Rp11.312 per USD.
Presumably due to increase of foreign capital inflow in portofolio in one month
to Indonesia's moneymarket. By such additional capital inflow, the total foreign
capital inflow through January-March was USD 5.7 billion.
Previously BI noted total
foreign capital entering Indonesia in the first 2 months of this year at USD 3
billion, broken down as follows : USD 1.9 billion in State Promissory Notes [SBN]
USD 0.8 billion and USD 0.3 billion at Bank Indonesia certificate. Last March
in particular, foreign capital that entered the stockmarket was USD 1.2
billion, in SBN USD 1.4 billion and the rest in SBI.
Last Thursday 13/4] USD slapped
inches of muscles to its strength in the past 2 months to overpower Yen. The
position of USD never posted any change at 103.89 Yen per USD. In the previous
transaction, USD touched the level of 104.07 which was the mightiest state
since January 23 last. Meanwhile against Euro USD had not changed much at USD
1,3770 per Euro The position of Euro against Yen was 143.04 Yen.
Today marketplayers were
optimistic against data of nonfarm payrolls scheduled to be released last
weekend [4/4]. The trend of USD strengthening against Yen would continue
provided the data released were sound. For information, the US Department of
Labor would release data of employment of 200,000 workers in March.
Only trouble was that the
process of USD strengthening would be held back by statement of the Fed's
Governor Janet Yellen who planned to maintain low bank interest. Yellen stated
that America's domestic economy needed this kind of policy to strengthen the
labor market. Economic growth looked stable but there was no denying that the
labor market had not returned to its normal state.
To most Americans, economic
recovery was still felt as recession and the condition was also reflected in
some economic statistic figures.
Yellen's statement was to
underscore the Fed's determination to maintain low bank interest, to keep
America's economy strong. About 2 weeks ago, Yellen's remark made after the
Fed's policy meeting about increased bank interest had triggered market
turbulence. At that time some investors interpreted Yellen's remark as signal
the increase of bank interest could be sooner than predicted.
Last March some of the
Fed's high officials signaled that next year there would be short term bank
interest, from is near zero percentage to around 1%. Some investors estimated
the bank interest would be in effect by mid to end of 2015.
Yelled stressed that easing
of bond buying program with the aim to maintain low bank interest for enhancing
growth could not be rated as uprooting of economic supporting factors. On the contrary
the Fed kept strengthening support in spite of slower pace.
In March last the Fed
decided to ease bond buying program to the amount of USD 10 billion to USD 55
billion. Predictably the Fed would keep axing buying of bonds this year, which
would end by Autumn. Hence this week would be in the range of Rpl 2,000.-
Rp12,300 per USD with tendency to consolidate.
The Capital Market
Index of IHSG at the
Indonesia Security Exchange [BEI] last Friday 14/41 was opened to increase by
3.02 points or 0.06% to become 4,894.34. Index of La 45 inched up by 0.78
points to the level of 829.55. Foreign investors were doing net buy of Rp108.78
billion. Trade volume came to 2.07 billion of shares worth Rp1.2 trillion. 68
shares strengthened, 130 shares weakened and 85 shares stagnated.
Meanwhile US stockmarket
ended up negative during transaction last Friday 14/41. Strengthening of
stockmarket had to stop after increasing in 4 consecutive days. Index of DJIA
inched down by 0.45 point to the level of 16,572.55. In the last 4 days index
of DJIA
On the contrary Asian
stockmarket was still stationary. Index of Nikkei inched up by 0.1 %, index of
Hang Seng inched down by 0.03%; index of Shanghai inched up by 0.3% an index of
Kospi inched down by 0.1 %. The reason was because investors were doubtful
about data of US nonfarm payrolls. The data had the potential increase of
197,000 from February which opened 175,000 new jobs. Summer in the USA
triggered high demand for labor. This would push workforce to 275,000 for March,
which was the highest
increase in the past 13 months.
Sentiment from increased
jobless claim from 16,000 to 326,000 [higher than the consencus of 317,000 ]. There
after there was widening US Trade Deficit unexpectedly at 7.7% to become USD
42.3 billion. The figure was by far higher than the consensus of economist of
USD 38.5 billion, the lowest level in the past 5 months so there was a
potential of US GDP growing less than the previous projection.
Index of Nikkei was
crawling up to positive area. Such was additional advantage after two day rally
toward highest level in the past three weeks. Meanwhile China's stockmarket was
trying to stay away from negative zone. The People's Bank of China had given
positive sentiment by making intervention on the moneymarket to make it move
naturally.
For sure IHSG would be
tested of its strength during last week-end's transaction [4/4] in the range of
4,850 - 4,900 with tendency to slightly strengthen. As known the pressure to
make profit mounted amidst same sentiment at the global stockmarket. It was
advisable to make selective buying of shares which promised sizable dividend
and to focus attention on the banking sector, basic industry, infra structure
and consumer sector. Some sectoral shares needed attention in regard to new
released regulations.
The Ministry of Energy and
Mineral Resources [ESDM] stated they had prepared two scenarios of restriction
of national coal production. As planned, this policy would be specified in
Ministrial Regulation and to be put in effect by 2015 next. The first scenario
would be the Government would permit national coal production to be increased
by 1% per year based on Domestic Market Obligation [DMO] and lowering export
volume at the same time.
The second scenario was
coal production was not permitted to increase against previous year, while the
DMO obligation continued to increase year after year. To make the policy run
well, the Ministry of ESDM had coordinated with the Provincial Governments.
Understandable because the Central Government only had the authority in
determining production volume for concession holder companies in coal
exploration [PKP2B] as published in the respective workplan [RKAB] of companies
per year.
As with RKAB for mining permit
[IUP1 it was the authority of each provincial Government. The Government had
conducted meeting with the local authorities of Palembang, and Balikpapan. The
meeting outcome boiled down to two scenarios to be analyzed by the Ministry
of ESDM to regulate restriction of coal production. Having coordinated with the
provincial Government, the next step for the Government was to ask for input
from businesspeople to set up a scenario to be chosen in restricting coal
production.
At the last stage, policy would
be formulated in the Ministry of ESDM regulation to be released this very year.
The Government would also specify the DMO policy to prohibit transfer of quota
for companies.
In particular investors
were advised to collect shares of the banking sector. The discourse about
maintaining benchmark rate was believed to make global investors continue doing
net buy of the reputably liquid shares. Marketplayers were also advised to
avoid shares of the plantation sector for the short term.
However, the ever increasing
price of share still had the chance to stimulate profit taking. In this case
shares of the consumption and trading sector were subject to technical
correction. Marketplayer's estimate of the two types of shares was still too
high. correction on shares of the plantation sector was more prevalent as
global prices of palm commodity prices went down.
Meanwhile shares of the
telecommunication sector tend to invigorate in the medium and long term. Low
internet market penetration in Indonesia opened growth opportunity to the
telecommunication industry, but to grab the opportunity operators must invest
significantly in broad networking way before seeing the fruits of effort.
With industrial built up
going on, price competition cooled down in data services like Short Message
Service [SMSI and voice. Offers of new services which was innovative would
serve as the main propeller force to capture opportunities in data while
maintaining income from sms services and voice.
Considering the execution
of Legislative Election on April 9, 2014 which ran peacefully and orderly and
Wednesday being declared as national holiday, IHSG was projected to consolidate
in the range of 4,875 - 5,000. (SS)
Business New - April 11, 2014
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