The JCI July 28, 2020
Jᴜʟʏ 28, 2020
* Tʜᴇ JCI ᴛʀᴀᴅɪɴɢ ʀᴀɴɢᴇ: 5,075ᴘᴛ-5,200ᴘᴛ ( Yᴇsᴛᴇʀᴅᴀʏ ᴄʟᴏsᴇ: 5,117ᴘᴛ )
* Wᴀʟʟ Sᴛʀᴇᴇᴛ ᴇɴᴅᴇᴅ ʜɪɢʜᴇʀ ʙʏ sᴏᴍᴇ 1% ᴏɴ ᴀ sᴇᴄᴏɴᴅ sᴛᴀɢᴇ Cᴏʀᴏɴᴀᴠɪʀᴜs sᴛɪᴍᴜʟᴜs ᴘʟᴀɴ
* Tʜᴇ JCI ɪs ᴇxᴘᴇᴄᴛᴇᴅ ᴛᴏ ꜰʟᴜᴄᴛᴜᴀᴛᴇ ʙᴜᴛ sᴜᴘᴘᴏʀᴛᴇᴅ ʙʏ sᴛᴀʙʟᴇ USDIDR ᴀɴᴅ ᴏɪʟ-ᴄʟᴏsᴇ
Morning,
The Jakarta Composite Index (JCI) today (28/7) is expected to be in the range of 5,075pt – 5,200pt in a consolidation phase but stable USDIDR and liquidity support. Meanwhile, yesterday (27/7) in Wall Street the DJIA ended higher by 115 points or 0.4% at 26,585pt , while the S&P500 and the Nasdaq both closed with a hike by 0.7% and 1.7%, respectively.
𝐈𝐧𝐝𝐨𝐧𝐞𝐬𝐢𝐚 𝐂𝐨𝐧𝐬𝐮𝐦𝐞𝐫 𝐒𝐞𝐜𝐭𝐨𝐫
𝐍𝐨𝐭 𝐚 𝐫𝐨𝐜𝐤𝐞𝐭 𝐬𝐜𝐢𝐞𝐧𝐜𝐞: 𝐈𝐧𝐝𝐨𝐧𝐞𝐬𝐢𝐚 𝐭𝐨 𝐡𝐚𝐯𝐞 𝐡𝐢𝐠𝐡𝐞𝐫 𝐩𝐨𝐫𝐭𝐢𝐨𝐧 𝐨𝐟 𝐡𝐢𝐠𝐡𝐞𝐫 𝐯𝐚𝐥𝐮𝐞-𝐚𝐝𝐝𝐞𝐝 𝐞𝐱𝐩𝐨𝐫𝐭 𝐠𝐨𝐨𝐝𝐬 𝐚𝐧𝐝 𝐬𝐞𝐫𝐯𝐢𝐜𝐞𝐬 𝐭𝐨 𝐞𝐧𝐡𝐚𝐧𝐜𝐞 𝐜𝐨𝐧𝐬𝐮𝐦𝐞𝐫𝐬’ 𝐩𝐮𝐫𝐜𝐡𝐚𝐬𝐢𝐧𝐠 𝐩𝐨𝐰𝐞𝐫
During 2015-2019, Indonesia economy have gained traction in-term of growth at the range of 4.9% YoY – 5.0% YoY as compared to the world’s rate of 3.5% YoY – 2.9% YoY. In-terms of consumer purchasing power, growth of the domestic economy currently put the country’s consumer annual purchasing power at USD4,163, or lower in compared to the world’s average at USD11,355 per person.
Apart from Private Consumption and Investments and Government Expenditures that made up the bulk of the economy, Export activities enhancement, in terms of volume and value, is expected to leverage national GDP per capita in our note.
In the last years, Indonesia export profile has improved to include, for example, Motorcycles that was valued at USD216mn in 2015 and increased to USD585mn last year, representing an CAGR of 26%. Also, export value of Biodiesel and Mixtures Thereof increased by an CAGR of 45% to USD668.2mn last year. Another item is the Tissue, Napkin and Towel goods that increased by an CAGR 15% to record the value of USD786mn. These three categories, however, contributed by a smaller portion of 2% at the most to total export value of the country last year. The top ten products in 2019 have been dominated by commodity Coal of USD6bn and Vegetable Oil , Palm Oil and its Fractions of USD4.4bn, both representing some 22% and 18% to Indonesia export values, respectively, in 2019.
Aware of the importance of developing higher value added goods, the government has set up several institutions including in the Ministry level, Small and Medium Enterprise Ministry to catch up value for the country’s export items.
Indeed, the higher the sale value the GDP value will increase accordingly and eventually lead to higher GDP per capita, at a given normal population growth rate.
A brief browse to trade statistics of countries with the highest GDP per capita, Switzerland for example, at USD83,8716 (ranked number 2 in 2019 after Luxemburg by IMF data), export items are dominated by Precious Stone & Metal (USD81bn), Pharmaceuticals (USD71bn), and Clock and Watches (USD24bn).
At the other end, yesterday the WTI price closed higher to USD41.6/barrel or by 0.8% by support of weaker USD index for political risk among the United States and China. Meanwhile the USDIDR closed at IDR14.605 vs. IDR14.614 the previous one.
We advise the following recommendation , for both trading and longer-time investment purpose. 𝐀𝐀𝐋𝐈, 𝐋𝐒𝐈𝐏 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘈𝘨𝘳𝘪, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘜𝘯𝘥𝘦𝘳𝘸𝘦𝘪𝘨𝘩𝘵 ), 𝐔𝐍𝐓𝐑, 𝐈𝐓𝐌𝐆, 𝐀𝐃𝐑𝐎, 𝐏𝐓𝐁𝐀 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘊𝘰𝘢𝘭 𝘔𝘪𝘯𝘪𝘯𝘨, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘔𝘢𝘳𝘬𝘦𝘵-𝘸𝘦𝘪𝘨𝘩𝘵), 𝐆𝐆𝐑𝐌, 𝐔𝐍𝐕𝐑, 𝐈𝐂𝐁𝐏 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘊𝘰𝘯𝘴𝘶𝘮𝘦𝘳, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘖𝘷𝘦𝘳𝘸𝘦𝘪𝘨𝘩𝘵 ), 𝐀𝐒𝐈𝐈 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘈𝘶𝘵𝘰𝘮𝘢𝘵𝘪𝘷𝘦, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘔𝘢𝘳𝘬𝘦𝘵-𝘸𝘦𝘪𝘨𝘩𝘵), 𝐚𝐧𝐝 𝐀𝐂𝐄𝐒, 𝐒𝐂𝐌𝐀, 𝐌𝐀𝐏𝐈 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘛𝘳𝘢𝘥𝘦, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘖𝘷𝘦𝘳𝘸𝘦𝘪𝘨𝘩𝘵),𝐚𝐧𝐝 𝐓𝐊𝐈𝐌 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘉𝘢𝘴𝘪𝘤 𝘐𝘯𝘥𝘶𝘴𝘵𝘳𝘺, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘔𝘢𝘳𝘬𝘦𝘵-𝘸𝘦𝘪𝘨𝘩𝘵).
Cheers,