This week the
default issue was more fearful than the domestic macro economy situation. At
home, there were perceptions economic growth target could be attained if the
Government was able to maintain people’s consumption and it could be positive
sentiment to Rupiah. Understandable because Rupiah had been hovering around Rp.13,000
per USD.
According to BI Governor Agus
Martowardojo. Might USD made countries whose transactions posted deficit, high
inflation, and weak fundamental economy to have their currencies under
pressure.
If the countries were making sound
reformation and could minimize deficit like India, the country could build
trust and Rupiah depreciation could be minimized.
Structural reformation was exercised
by the Government by managing subsidy and food the better was, plus enhancing
infrastructure development; but if there were policies rated by marketplayers
as still conflicting and inconsistent, it could lessen credibility.
Per Q 1/2015, DBT ratio was posted
at USD 3.8 billion or around 1.8% against GDP. Inflation per May 2015 came to
7.15% Y o y, high above the APBN assumption-P 2015 which was 5%.
It was right indeed for the Government
to keep controlling inflation by some instruments like the Perpres Presidential
Regulation Number 71 2015 on the Stipulation of price of essential needs. From
the external factor, international creditors were said to be rejecting program
of the Greece Government to end financial crisis, but they were forwarding a
counter-proposal. News of the rejection was announced by Greece Prime Minister
Alexis Trispas, faded all the hope of agreement signing between Athens and the
creditors.
Greece need extra financial aid to
save the nation from default to pay debt worth €uro 1.6 billion to IMF which
was due by end of June. Too bad, the creditors refused to pay bailout if Greece
was not willing to exercise further reformation.
IMF seemed to be the most skeptical in
the Troika body which determined the amount of Greece bailout fund.
According to Tsipras, certain
institutions peristed not to accept equal action taken by the Government of
Greece. Rejections never happened before, neither in India nor in Portugal.
Tsipiras remarked further “This
strange attitude could mean they hide one out of two points. They did not wish
any agreement or they were serving some interest in Greece. The condition put
Greece on a critical point because if they failed to pay, they could be kicked
out of Grexit, or even worse kicked out of Uni Europe.
Last Wednesday (14/6) Finance
Minister of Euro zone (Euro group) ran a meeting to discuss reformation in
June. This seemed to rely on Greece to score surplus, which was believed to be
very optimistic: axing of pension fund, increased income from the tax sector
and privatization of companies.
If the proposal was approved, which
was most unlikely, Greece would receive European fund worth euro 35 billion for
financing economic development till 2020. Unfortunately Dimitris Koutsoumbas,
Secretary General of the Greece Communist Party stated that Greece could not
accept an “anti democratic agreement” with Uni Europe.
According to Dimitris, the people of
Greece needed a comprehensive to Dimitris, the people of Greece needed a
comprehensive plan to exit from the Eurozone and than common currency was not
going to solve anything. The Uni Europe and German attitude could not be
accepted. Greece’s past Government must also be accountable for it. Because of
the this content, chances of Greece running another election this year is
great.”
The coalition Government led by the
Syzira Party only had 12 majority votes and most probably hard to offer a new
proposal to their own Parliament.
The Moneymarket
Rupiah value at inter-bank
transaction Jakarta last Thursday (25/6) inched down by 5 points to the level
of Rp.13,306 per USD against the previous Rp.13,301 per USD. Rupiah value was
moving flat with tendency to weaken against USD amidst marketplayers watching
the case of bail out for Greece.
Officials of the eurozone last
Thursday again negotiated to arrive at an agreement to save Greece from default
after previously on Wednesday (24/6) failed to arrive at an agreement. The Uni
Europe Summit would discuss various global development including the Greece
case. The agenda would be the market’s focus this week.
Analysts said that if Greece at the
meeting again failed to have bailout, the investment instrument tend to be
under pressure including that in Indonesia. Evidently Rupiah weakened together
with most of Asian currencies in respond to the situation in Greece.
However the market was sure that
Rupiah weakening tend to be limited as BI released macro prudential regulation
in the form of LTV or FTV ratio for property credit including KPR and reduction
of down payment for automotive credit.
The policy was expected to keep the
momentum of economic growth because the property and automotive sectors were
related and had significant effect on other economic sectors. Meanwhile in BI
mid rate last Thursday (25/6) Rupiah was seen to weaken to Rp.13,323 against
the previous Rp.13,280 per USD.
Rupiah was the most depreciated
currency in Asia last week which moved the varied way. Malaysia’s Ringgit was
the second most depreciated currency next to Rupiah, down by 0.17% during
closing session among others suppressed by Fitch who planned to lower
investment in that country.
This week pressures on Asian
currencies was still due to the Greek factor and the Fed planning to increase
benchmark rate.
In the event that Greece failed to
pay their debt, the effect could befall on middle income states like Indonesia,
Brazil, turkey, India, south Africa etc. their currencies would weaken, but it
would only be temporary.
By prediction USD would settle at
above Rp.13,000 – Rp13,400 (26/6). This week Rupiah value would be in the range
of Rp.13,250 – Rp.13,350 per USD. Most likely BI would be in the market to make
intervention to keep Rupiah from falling into Rp.13,500 per USD as a new
psychological level.
As known, the Greece debt crisis
which had not seen any ray of hope made euro even sink deeper. Last week (25/6)
the EUR/GBP was corrected by 0.21% to become 0.71197. Weakening of EUR/GBP and
IMF was because the market was still waiting for meeting outcome between Greece
Prime Minister Alexis Tsipras with leaders of Uni Europe (ECB) and IMF known as
Troika which still continued on Thursday (25/6).
One day before Greece’ new proposal
to increase tax and to axe pensioners fringe benefit was rejected by creditors.
All in all the risk of Greece default to pay EURO 1,5 billion which was due on
June 30,2015 would swell. Since last week no positive news was able to uplift
euro.
Even if Greece finally get a new
loan package, the sentiment would only support strengthening of Euro
moderately.
Besides, Euro was still adopting
eased money policy. On the contrary England tighten their monetary policy with
speculations of increased benchmark rate policy with speculations of increased
benchmark rate being supported by their impressive economic dat.
Data week marketplayers were still
focusing attention on the Fed’s monetary policy as data of new homes buying in
the USA turned better; Besides the prospect of increased interest when the Fed
stated that America’s economy was ready to have 2 interest increase this year,
i.e. in September and December.
The sentiment being awaited by the
market was US GDP of the first quarter. The data showed state health of US
economy.
The Capital Market
Index of IHSG was closed red during
transaction last Thursday (25.6). Data of RTI showed that index inched down by
0.68% or 33.474 points to the level of 4.920.042. Apparently 166 shares went
down, 96 went up and 89 stagnated.
Transaction on that day 4.5 billion
lots of shares at the value of Rp.5.3 trillion. By sector, 9 out of 10 indices
turned red. Index of consumer’s goods went down by 1.63%, basic industry down
by, 1.51%. Only index of agriculture turned green or 0.22%.
Weakening of IHSG was in parallel
with weakening of the global stockmarket. Hong Kong shares were falling, to
stop continual strengthening over the past 4 days. Index of Hang Seng was down
by 1% to the level of 27,145 Index of China Enterprises was down by 1.6% to the
level of 13,467.90.
At BEI IHSG was striving to break
through the psychological level of 5,000. To open transaction, IHSG inched down
by 9.384 points (0.19%) to the level of 4,944.132 due to negative sentiment
from the global market.
Index continued to nose dive since
opening session. Premium shares were beginning to be released by investors.
During closing session in Session 1, IHSG was axed by 19.243 points (0.39%) to
the level of 4,934.273 due to pressures to sell by investors. Index was trapped
in the red zone since opening session.
Only one sector remained strong,
i.e. agriculture, and the rest fell into the red zone. Index failed to touch
the green zone today. To close session on Thursday (25/6) IHSG was axed by
33.474 points (0.68%) to the level of 4,920.042 meanwhile Index of LQ 45 was
corrected by 8.581 points (1.01%) to the level of 840.897. foreign investors
were seen to make foreign net buy of Rp.150,306 billion in the entire market.
Trading was running moderately with
frequency of 215,258 transactions and volume 4.523 billion lots worth Rp.5.321
trillion. 96 shares rose, 166 shares went down and 89 shares stagnated.
Meanwhile Asian stockmarket were
closed to weaken with China’s stockmarket sinking deepest. Singapore
stockmarket made it to elevate to the green zone. Index of Nikkei 225 weakened by
96.63 points (0.46%) to the level of 2059.22 points (0.95%) to the level of
27,145.75. Index of Composite Shanghai dropped by 162.37 points (3.46%) to the
level of 4.527.78. Index of Straits Times rose by 4.71 points (0.41%) to the
level of 3,356.04.
Not only Asian stockmarkets
weakened, the never ending Greece drama made index of European stockmarket
slump on the second day last Thursday (25/6). Index of STOXX Europe 600 inched
down by 0.41% during opening session to 396.05. Furthermore index then went
down by 0.76% to the level of 396.20 or down by 0.2%.
Negotiations between the Greece
Government and Europe representatives ended without significant result Greece
Prime Minister met with TROIKA this end of month to discuss phase 3 bail out extension
this end of month and Greece had to pay first installment of USD 7 billion to
IMF.
Under the circumstances IHSG would
move in the range of 4,925 – 5,000 with positive sentiment from property and
automotive sectors.
According to GAIKINDO sales dropped
due to falling purchasing power and low commodity prices. GAIKINDO expected that
infra structure could jack up sales.
This year the Government threw fund
of Rp.290 trillion for infra-structure development. The figure was significant
increase compared to 2014 which was Rp.240 trillion. Admittedly sales target
for automotive sales would be hard to meet, therefore GAIKINDO set sales target
of around 1 million to 1.1 million units of cars. The revision referred to
sales of last May which dropped again.
With reference to GAIKINDO data
sales of May was only 79.236 units or down against April at 81,600. Sales of
last May was the lowest monthly sales of the year. Total whole sale of cars
through January-May was posted at 443,000 units. The figure was a downturn of
16.6% against same period last year at 531,000.
Meanwhile sales of retail in
January-May came to 432,000 units or down by 13.7% against same period the
previous month at 51.000 units. With that downturn, GAIKINDO said that there
was still positive development in the automotive credit. Last year car sales by
credit was in the range of 70%-75%. This year in line with bank expansion or
financing agencies, the position of credit cars constituted 80% to 90%. (SS)
Business News - July 1, 2015
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