Sunday, 14 September 2014


Marketplayers would watch on domestic macro economic data, especially inflation and trade balance. Meanwhile the external factor like political tension in East Europe and banking crisis in Portugal were still not giving any significant effect.

Firstly, economic growth in Q-2 was predictably better than Q-1 which was only 5.21%. The Idul Fitri factor was one of the cause of increasing economy.

Economic growth in Q-2 might reach 5.25% - 5.35%. The reason was that public consumption would move up due to the Lebaran factor. Direct investment would still be dynamic. Companies were running new factories and engine overhaul to jack up production output dure to Lebaran.

Moreover new investment would contribute significantly to growth in Q III and IV; this was because by that time political was showing certainty. The next Government and their economic course was getting clearer and the good prospect would invigorate investment. Economic growth in Q 2 might come to 5.3%

Secondly the Central Statistics Board [BPS] reported that inflation in July 2014 was posed at 0.93%. Meanwhile inflation rate y o y from July 2013 to July 2014 was posted at 4.53% - while inflation by calendar year was posted at 2.94%. Inflation in core component was posted at 0.52%.

Inflation in July 2014 was posed at 0.93% was contributed by food 1.94%, ready food, cigarette and tobacco 1% clothing 0.85% and transportation, communication and financial service 0.88%.

Thirdly, BPS also disclosed that Indonesia’s trade balance in June 2014 posted deficit of USD 0.3 billion. Trade balance in non oil-gas commodities posted surplus of 0.3 billion while trade balance in the oil gas sector posted surplus of 0.3 billion while trade balance in the oil gas sector posted surplus of 0.13 million tons and in non oil-gas posted surplus of 32.1 million tons.

Export in June 2014 came to USD 15.42 bullion, consisting of oil-gas was USD 12.63 billion. Import in June 2014 came to USD 15.72 billion consisting of oil gas 3.39 billion and non oil gas export USD 12.33 billion.

Accumulatively, trade balance in January-June 2014 or in Semester I-2014 posted deficit of USD 1.16 billion consisting of deficit in oil-gas USD 6.12 billion while non oil gas posted surplus of USD 4.96 billion. Accumulatively export in January-June 2014 came to USD 88.83 billion while import of the same period was posted at USD 89.98 billion.

The Moneymarket

Rupiah during initial session in Jakarta o Tuesday [5/8] strengthened by 16 points to become Rp11,727 per USD against the previous position at Rp11,743 per USD. Rupiah was still in positive zone although being overshadowed by increased interest by the Fed.

Inflation data this year at 0.93% which was below the psychological level of 1% was still supportive to Rupiah value which strengthening effect was predicated at home. However, the strengthening effect was predicated to be only temporary. For the long term, Rupiah strengthening was still was still overshadowed by Indonesia’s trade balance which posted deficit. In June 2014 Indonesia’s trade balance posted deficit of USD 305.1 million. For the long term, data of Trade balance was still negative sentiment to Rupiah.

Besides, weakening of some currencies in some developing countries would influence Rupiah value against USD. The case of default in Argentine and banking crisis in Portugal would affect Rupiah negatively. Dollar index was still consistent in maintaining strengthening trend especially after announcement of America’s bettered GDP in QII and execution of monthly Quantitative Easing at USD 25 billion last week.

Rupiah strengthening trend was losing steam by end of July [29/7] last year as unemployment level in the USA was announced. The impact of USD strengthening at the global money market was still felt as all Asian currencies weakened against USD. After Idul Fitri lon holiday, USD was seen to strengthen to suppress Rupiah down to Rp11.803 per USD. [257].

Perhaps a little positive sentiment was seen for Rupiah coming from BI’s policy on forex term deposit for Syariah banking. The Syariah forex term deposit was the first Syariah monetary operation instrument of BI in foreign currency. The rules for this instrument was written in BI’ Regulation No. 16/12/PBI/2014 on Syariah Monetary operations.

Generally speaking the Syariah Forex Deposit term features were based on Ju’alah Testament, i.e. ilitzam or commitment to give lwadh.ju’l or certain reward over natijah [obtained yield] determined by a certain task.

Forex Term Deposit would be released in the form of USD through auction, participated by Syariah Bank and Syariah business units who had forex reserve permit. Syariah forex Deposit term could be issued for tenure of one day up to 12 months. To such instruments BI would offer reward which would be liquidated before early redemption.

Spontaneously the Syariah banking industry welcomed issuance of this new instrument to probe deeper on Syariah financial market. This newly released instrument by BI could prevent forex from flowing out of the country and improve Syariah liquidity.

Syariah Forex banking by volume was limited but the nature was case-by-case where certain banks had limited volume or even over liquid because the outlet for forex financing of Syariah banking tend to be small. The widening choice for liquidity managing instruments was expected to enhance role of the Syariah banking sector in financing economic growth.

From the above picture presumably Rupiah exchange rate value on Tuesday afternoon [5/8] was predicated to move in the range of Rp.11,725 – Rp.11,765 per USD to continued over the week in the range of Rp.11,650 – Rp.11,700 per USD on condition that outcome of Constitutional Court in the case of Prabowo-Hatta protest would conclude in happy ending.

The Capital Market

On the first post Idul Fitri day yesterday [4/8] index of IHSG strengthened by 30 points thanks to buying rush during closing session. Local investors were doing a lot of net buying and IHSG was closed to inch up by 30.443 points [0.60%] to the level of 5,119.245. Meanwhile index of LQ45 was closed to soar up by 9.782 points [1.13%] to 878.079. Wall Street managed to rebound after being corrected the previous week in the past 2 years. Falling shares were being hunted by investors.

During closing session last Monday [4/8] index of Dow Jones rose by 78.06 points [0.47%] to the level of 1,939.18 while index of 78.06 points [0.73%] to the level of 1,939.18 while index of 78.06 points [0.72%] to the level of 4,383.89.

Last Tuesday [5/8] IHSG would predictably return to the green zone as Asian stockmarket bettered. However act of profit taking needed to be watched on while regional stockmarkets tend to move variably among others Nikkei 225 inching down by 9.09 points [0.06%] to the level of 15,465.41 and index of Straits times increased by 12.18 points [0.37%] To the level of 3,330.58

IHSG potential to increase during closing session last Tuesday [5.8] which was predicated to be in the range of 5,125 – 5,175 moreover index of shares to serve as benchmark would become more varied. In the near future, BEI would jack up BUMN index which consisted of 12 most liquid and most active BUMN emitens.

Index of BUMN would be launched in September this year. BUMN index was expected to serve as reference to investment managers to develop derivative product like the Exchange Trade Fund [ETF] or Reksadana insurance products. Index of BUMN was born as there was investors’ demand. BUMN shares had been investors’ target foreign or local as they had strong capitalization and fundamentally prospective.

So far many investors live to buy BUMN shares. If the combined index was there in would be easy for investors to collect them; besides BUMN index was a reflection of national economic growth. BEI expected that Government owned companies [BUMN] could be encourage to play at the stockmarket. Some BUMN shone bright after being listed at BEI.

Of around 20 BUMN emitents listed at BEI, only 12 shares would be chosen to be included in BUMN index. BEI would do screening based on market capitalization, trading transaction and fundamental performance. Thereby BUMN emitents would be motivated to keep on improving their fundamental performance.

For information, based on BEI statistical data, of 10 biggest capital in the stockmarket 5 were BUMN emitents, they were : PT Bank Rakyat Indonesia Tbk [BBRI], PT Telekomunikasi Indonesia Tbk [TLKM], PT Bank Mandiri Tbk, PT PGAS, and PT Semen Indonesia Tbk [SMGR]. (SS)

Business New - August 8, 2014

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