The JCI July 10, 2020
Jᴜʟʏ 10, 2020
* DJIA ᴀɴᴅ S&P500 ᴄʟᴏsᴇᴅ ʟᴏᴡᴇʀ ᴏɴ ᴄᴏʀᴏɴᴀᴠɪʀᴜs ʀᴇsᴜʀɢᴇɴᴄᴇ ᴡᴏʀʀʏ, ᴡʜɪʟᴇ Nᴀsᴅᴀǫ ʜɪᴛ ʀᴇᴄᴏʀᴅ ʜɪɢʜ ʙʏ sᴜᴘᴘᴏʀᴛ ᴏꜰ ʜɪᴋᴇ ᴏɴ ᴍᴀᴊᴏʀ ᴛᴇᴄʜ ᴄᴏᴜɴᴛᴇʀs
* Tʜᴇ JCI ɪs ᴇxᴘᴇᴄᴛᴇᴅ ᴛᴏ ʙᴇ sᴜᴘᴘᴏʀᴛᴇᴅ ʙʏ sᴛᴀʙʟᴇ USDIDR
Morning,
The Jakarta Composite Index (JCI) today (10/7) is expected to be in the range of 5,050pt – 5,150pt with investors remain cautious in stance for 2Q20 earnings release. Meanwhile, yesterday (9/7) in Wall Street the DJIA ended lower by 361 points or 1.4% at 25,706pt, while the S&P500 and the Nasdaq both closed lower and higher by 0.6% and 0.5%, respectively.
𝐈𝐧𝐝𝐨𝐧𝐞𝐬𝐢𝐚 𝐂𝐨𝐧𝐬𝐮𝐦𝐞𝐫 𝐒𝐞𝐜𝐭𝐨𝐫 –𝐬𝐨𝐮𝐫𝐜𝐞 𝐨𝐟 𝐫𝐞𝐬𝐢𝐥𝐢𝐞𝐧𝐜𝐞
𝐂𝐨𝐧𝐬𝐨𝐥𝐢𝐝𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐬𝐡𝐢𝐟𝐭𝐢𝐧𝐠 𝐨𝐟 𝐫𝐞𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐢𝐬 𝐞𝐱𝐩𝐞𝐜𝐭𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐦𝐨𝐫𝐞 𝐝𝐞𝐟𝐢𝐧𝐞𝐝 𝐚𝐧𝐝 𝐭𝐨 𝐜𝐨𝐧𝐭𝐢𝐧𝐮𝐞 𝐢𝐧 𝟑𝐐𝟐𝟎 𝐨𝐧𝐰𝐚𝐫𝐝𝐬 𝐭𝐨 𝐬𝐮𝐩𝐩𝐨𝐫𝐭 𝐩𝐮𝐫𝐜𝐡𝐚𝐬𝐢𝐧𝐠 𝐩𝐨𝐰𝐞𝐫
We believe resources movement in Indonesia businesses to include those of capital and labor, to specified sectors is expected to mitigate adverse impact of global lock-down , mainly unemployment and declining purchasing power of consumers.
According to the Vice Chairman of Indonesian Chamber of Commerce and Industry (“KADIN or Kamar Dagang dan Industri Indonesia”), Shinta Widjaja Kamdani, Covid-19 related work termination ( “PHK or Pemutusan Hubungan Kerja”) was recorded at 6mn cases as at end of May since the the start of pandemic in early March, the figure of which was above the government register at some 2mn workers. According to her, sectors that were forced to terminate workers to include hotel and restaurants (1.5mn workers), textile (2.1mn), land transportation (1.4mn), retails (0.4mn). KADIN is an association for Indonesian entrepreneurs that was established in 1968, with about 91k business owners as member.
The above fact is an inevitable immediate result of the global lock-down during the Covid-19 period that eventually hurt consumers’ purchasing power, in our view. In the 1Q20 release of GDP report we noted, however, several sectors that showed resilience if not slightly expanded. Tobacco industry grew by 3.49% YoY (2019: 3.36% YoY), Information & communications by 9.81% YoY (2019:9.41% YoY), Financial Intermediary services at 13.67% YoY (2019: 6.14% YoY), Health facilities services at 10.39% (2019: 8.68%).
Movement of resources to the above sectors with the support of policy makers is expected to mitigate loss of consumers’ purchasing power this year, in our note.
At the other end, yesterday the WTI price closed lower at USD39.2/barrel, or by 3.1%, and the USDIDR closed at IDR14.446 vs. IDR14.460 the previous one.
We advise the following recommendation as for now, 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,