The JCI July 14, 2020
Dear All,
Jᴜʟʏ 14, 2020
* Tʜᴇ JCI ᴛʀᴀᴅɪɴɢ ʀᴀɴɢᴇ: 5,025ᴘᴛ – 5, 150ᴘᴛ ( Yᴇsᴛᴇʀᴅᴀʏ ᴄʟᴏsᴇ: 5,064ᴘᴛ)
* Wᴀʟʟ Sᴛʀᴇᴇᴛ ʏᴇsᴛᴇʀᴅᴀʏ ʟᴀʀɢᴇʟʏ ᴡᴀs sᴜᴘᴘᴏʀᴛᴇᴅ ʙʏ ᴘᴏsɪᴛɪᴠᴇ ɴᴇᴡs ᴏɴ Cᴏᴠɪᴅ-19 ᴠɪʀᴜs ᴘʀᴏɢʀᴇss, ᴡʜɪʟᴇ ᴛʜᴇ S&P500 ᴀɴᴅ ᴛʜᴇ Nᴀsᴅᴀǫ ᴏꜰꜰ ɪᴛs ʜɪɢʜ ʟᴇᴠᴇʟ ᴏɴ ᴄᴏɴsᴏʟɪᴅᴀᴛɪᴏɴ
* Tʜᴇ JCI ɪs ᴇxᴘᴇᴄᴛᴇᴅ ᴛᴏ ꜰʟᴜᴄᴛᴜᴀᴛᴇ ʙᴜᴛ sᴜᴘᴘᴏʀᴛᴇᴅ ʙʏ ᴇᴠᴇʀ sᴛᴀʙʟᴇ USDIDR
Morning,
The Jakarta Composite Index (JCI) today (14/7) is expected to be in the range of 5,025pt – 5,150pt to fluctuate with investors in monitor of week’s data on Indonesia trade for June tomorrow (15/7), and on Indonesia central bank decision for reference rate (16/7).
Meanwhile, yesterday (13/7) in Wall Street the DJIA ended higher by 11 points or 0.04% at 26,086pt, while the S&P500 and the Nasdaq both closed lower by 0.9% and 2.1%, respectively. To the contrary, stock futures opened higher by some 0.3% this morning ahead of the United States bank earnings release.
𝐈𝐧𝐝𝐨𝐧𝐞𝐬𝐢𝐚 𝐂𝐨𝐧𝐬𝐮𝐦𝐞𝐫 𝐒𝐞𝐜𝐭𝐨𝐫
𝐈𝐧𝐝𝐨𝐧𝐞𝐬𝐢𝐚 𝐢𝐦𝐩𝐫𝐨𝐯𝐞 𝐭𝐫𝐚𝐝𝐞 𝐟𝐢𝐠𝐮𝐫𝐞𝐬 𝐡𝐞𝐥𝐩 𝐭𝐨 𝐦𝐢𝐭𝐢𝐠𝐚𝐭𝐞 𝐬𝐥𝐨𝐰𝐢𝐧𝐠 𝐝𝐨𝐰𝐧 𝐢𝐧 𝐜𝐨𝐧𝐬𝐮𝐦𝐩𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭𝐬 𝐚𝐧𝐝 𝐭𝐡𝐮𝐬 𝐬𝐮𝐩𝐩𝐨𝐫𝐭 𝐩𝐮𝐫𝐜𝐡𝐚𝐬𝐢𝐧𝐠 𝐩𝐨𝐰𝐞𝐫
In the past decades and until the present time, private consumption has been steadily be the backbone of Indonesia economy, made up of 55%-59% of total expenditures, and the highest growth contributors. The second highest contributor to the Indonesian economy has been investments or around 32% to total expenditures in the Gross Domestic Products (GDP), followed by government expenditures of around 10% and the rest were filled by net export.
With the above trait, Indonesia GDP during the period of 2015 -2019 have been hovering in the bracket of 4.8% YoY – 5.2%.
In the last quarter ,1Q20, factoring-in global slow down due to the Covid-19 pandemic , the GDP grew at 2.97% YoY. At this rate, private consumption is the highest growth contributor at 1.56ppt, followed by gross investments at 0.56ppt, then government expenditures at 0.22ppt, and net export at 0.18ppt (4Q19: -0.89ppt, 1Q19:-0.86ppt). The aforementioned figures highlighted the situation that, while Indonesia international trade does not make-up a central component of its economy, its movement does. Thus, by technical calculation, the higher the trade deficit the worse it is the impact to total GDP growth.
1Q20, GDP growth has been benefitted by the improving trade figures. January to May this year , Indonesia incurred a total surplus of USD4.3bn (January-May 2019: deficits of USD2.7bn). Most of the surplus came from lower volume of crude oil import, down by 10% YoY during January – May 2020, and lower volume of non-oil and gas import, down by 8% YoY in this year.
Last year, in an effort to curb import, the government carried out a policy of mandatory selling of crude oil from private contractors to state-owned Pertamina, to improve domestic lifting. Also, the government accelerated the Bio-fuels consumption as the alternative fuels. We view these policies also contributed to the current trade surplus position.
Tomorrow (15/7), Indonesia statistics office is scheduled to announce June figure of international trade, which we expect will not change this year surplus position.
At the other end, yesterday (13/7) the WTI price closed lower by 1.1% at USD40.1/barrel, on demand worries as new cases of Covid-19 spiked in most countries. Meanwhile, the USDIDR closed at IDR14.486 vs. IDR14.501 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,