Monday, 19 May 2014

RUPIAH STAND A CHANCE TO STRENGTHEN AS IHSG CONSOLIDATES



Pressure was still lurking on Rupiah, driving it to a state of weakness. However the latest data from America which was negative might ease pressures on Rupiah. Although Durable Goods Orders was an­nounced to be good, increase of Jobless Claims in the USA and positive data of Business Climate Germany pushed Dollar Index down. Return of US Treasury 10 years also went down to 2.680%. This situation helped Asian currencies to strengthen.

Rupiah could have strengthened last weekend [25/4] as US data was unsatisfactory in spite of high demand for USD for import by end of month - would resist weakening. This week domestic sentiment would enter as data of trade balance was announced and predicted to be better.

The stockmarket stood a chance to strength­en moderately with tendency to consolidate as most stockplayers were disappointed about delayed ac­quisition of BBTN Bank by Bank Mandiri as announced last week [23/41. This would trigger not-so-good sen­timent to both emitents.

The Moneymarket

Rupiah exchange rate value against USD again slumped during morning session on Friday last week [25/4] although still limited. High demand for USD seemed to suppress Rupiah, although global trends signaled that USD was corrected. Rupiah was seen to move in the range of Rp 11,605 - Rp 11,615 per USD.

As footnote, USD was under pressure by Yen as mounting tension in Ukraina shook optimism about US economic growth following sound data of durable goods. USD slipped down against some leading cur­rencies. Previously USD had strengthened after data of durable goods for next March was above expecta­tion.

Index of USD as related to the value against six currencies of the world, inched down by 0.085 points or 0.1% to 79.773. USD value inched down by 0.21% against Yen to USD 102.32 per Yen. Weakening of USD made Euro to strengthen to USD 1.3831 per Euro lifting up from the lowest level of USD 1.3791 per Euro as President of Euro Central Bank Mario Dhargi underscored the potentials of as­set buying to shield off deflation risk.

In short, USD was under pressure following anxiety over conflict between western states and Russia, which blurred out the US economy image. And yet order of durable goods in the US in March rose by 2.6% above economic estimate of 2%. The result was that USD fell against some of the leading currencies. Although movement in the moneymarket was limited, mounting tension in Ukraina caused the market to watch on risk-off potentials.

At home, previously Rupiah value against USD was seen to weaken. On Wednesday 123/41 Ru­piah even nose dived to Rp 11,600 Per USD.

Most marketplayers were still disappointed by PDIP votes attainment in the last election with Joko Widodo as Presidential candidate only managed to win 19.5% votes against the projected 27%. As footnote Rupiah was last known to be at above Rp 11,600 position during closing on February 28, 2014 last; to be exact Rp 11,610 per USD.

This week, supposedly marketplayers watch Bl's data which posted Indonesia's overseas debt [ULN] on February 2014 at USD 272.1 billion or Rp 3,108.47 trillion based on Rupiah exchange rate Rp 11,424 per USD. The position of ULN on February 2014 consisted of ULN of the public sec­tor USD 129.0 billion and ULN of the private sector USD 143.1 billion.

Indonesia's ULN of the public sector con­sisted of Government's ULN by February 2014 USD 121.91 billion, an increase of USD 3.035 billion [2.55%l against January at USD 118.877 billion. Meanwhile BI's ULN fell by USD 1.926 [21.29%] to become USD 7.119 billion against January 2014 at USD 9.045. Downturn was on account of reduction of other obligations in February at USD 3.232 billion which went down against previous period at USD 5.426 billion.

BI's overseas debt from multilateral creditors only originated from IMF and was already paid in Oc­tober 2006. The bonds owned by BI were partly Gov­ernment's Yankee Bonds of 2016 due on August 2006 and managed by BI.

From the above picture it was estimated that Rupiah position by last week end would have been at Rp 1,450 - Rp 11.550 per USD. Rupiah had the potential to strengthen if announcement of Presidential candidate by PDIP was cancelled, most likely Rupiah would be in the range of Rp 11,400 - Rp 11,550 per USD.

The Capital Market

Index of IHSG during early session last week­end 125/41 was for the time being in positive zone, although moving only slightly. IHSG was opened to inch up by 2.31 points and continued to 7.62 points to become 4,898,69. 104 shares were posted to increase, 41 shares down and 57 shares station­ary. The transaction value was only posted at Rp 366.246 billion.

Broadly speaking shares movement at BI was not showing any sign of net buy. Meanwhile in Asia, shares were moving two-way with index of NIKKEI moving by 108.01 points or 0.75% to 14,513. In­dex of Hang Seng inched down by 146.83 points or 0.65% to become 22,415.97 while index of Straits Times inched down to 3,273.76.

IHSG was predicted to move mixed with ten­dency to consolidate last weekend. External senti­ment also tend to be mixed. US and Europe stockmar­ket was closed mixed with tendency to strengthen although word was out that Rusia had begun military exercise on Ukraina's border. At home, investors tend to take wait-and-see position about party's coalition and announcement of presidential candidating.

Noteworthy was the fact that suspended ac­quisition of Bank BTN Tbk by PT Bank Mandiri Tbk [BMRI] made marketplayers disappointed. The rea­son was that price of shares of the two banks al­ready gone up because of the news. During closing session last Thursday 124/41 share of BTN dropped by 95 points or equal to Rp 1,210 against the previous Rp 1,305.

Shares on BTN was transacted with trade volume of 151.824 billion lots while total transaction reached Rp184.17 billion. Shares of BTN moved in the range of Rp 1,170 - Rp 1,290. The same was with BTN shares, shares of Bank Mandiri was also under pressure although not as much as BTN shares. Shares of Bank Mandiri also dropped by Rp25 or 0.3% to Rp9,875.

During closing session last weekend 125/41 IHSG was projected to move within narrow range and tend to consolidate in the range of 4,875 - 4,925; increased index of US stockmarket was among the catalysts, as bluechip shares rebound. Index of Dow Jones Industrial Average was closed to inch up by 0.01 %, while index of S&P 500 was appreciated by 0.17%.

Increase of US stockmarket index was due to report of better income from technological shares like Apple and facebook. Somehow increase was slightly held back by anxiety over mounting tension in Ukraina. The Apple share which had biggest market capitalization, rose by 8.2% to become USD 567.77 one day after posting income way above expectation.

Income of Facebook Inc. and Caterpillar Inc was also above expectation. The market saw Apple balance sheet would slump, but the critics was evidently not proven. Apple was on the right track, only the market did not see Apple shares breaking through USD 600. Facebook and Apple booked heartening re­sult after closing of market last Wednesday [23/4], and announcement would buy back the big shares and make stock split.

Unfortunately shares of Facebook and Gen­eral Motors thinned out after increase in early session, while Bellwethers Caterpillar and Aetna remained higher as result was above expectation.
Previously index of Dow Jones Industrial Average [DJIA] was closed to remain unchanged at 16,501.65 , index of S&P 500 increased by 3.22 points or 0.17% to 1,878.61 and Nasdaq Composite Index strengthened by 21.372 points or 0.52% to 4,148.338.

At home, IHSG curve line was lack of senti­ment. Investors were still waiting for release of infla­tion data and Trade Balance of April 2004 which was originally to be released by the BPS Central Board of Statistics this week. IHSG was projected to consili­date with tendency to improve in the range of 4,900 - 4,950.

However, investors needed to observe this one Government's policy in relation to increase of basic electricity tariff which had influence on the prospect of some emitent's business. Word was out that the Ministry of Industry was trying to find away that Medium Industry 1-3 [go public], big industry 1-4 effective by May 2014 would not cause domestic in­dustry to be suppressed.

This was important to make industry in Indo­nesia remain competitive, meaning domestic industry could be used. The Ministry of Industry had sent a letter to President SBY about industry's grievances being affected by tariff increase based on input from associations.

As known, electricity tariff would increase for category I-3 [go public], big industry I-4 and to make price adjustment per May 1, 2014 gradually or once every 2 months until December 2014. This was in line with the Regulation of the Ministry of Energy and Mineral Resources No 09. 2014 next of Electricity Tariff in accordance with reduction of electricity sub­sidy since 2013. (SS)

Business New - April 30, 2014

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