The JCI July 8, 2020
Jᴜʟʏ 8, 2020
* Tʜᴇ JCI ᴛʀᴀᴅɪɴɢ ʀᴀɴɢᴇ: 4,950ᴘᴛ-5,050ᴘᴛ (Yᴇsᴛsᴇʀᴅᴀʏ ᴄʟᴏsᴇ: 4,987ᴘᴛ)
* Wᴀʟʟ Sᴛʀᴇᴇᴛ ʜᴀᴅ ᴀ ᴛᴇᴄʜɴɪᴄᴀʟ sᴇʟʟ-ᴏꜰꜰ ʙʏ sᴏᴍᴇ 1% ᴀꜰᴛᴇʀ 2-ᴅᴀʏs ʀᴀʟʟʏ
* Tʜᴇ JCI ɪs ᴇxᴘᴇᴄᴛᴇᴅ ᴛᴏ ꜰʟᴜᴄᴛᴜᴀᴛᴇ ᴀɴᴅ sᴜᴘᴘᴏʀᴛᴇᴅ ʙʏ sᴛᴀʙʟᴇ USDIDR ᴀɴᴅ ᴏɪʟ ᴄʟᴏsᴇ
Morning,
The Jakarta Composite Index (JCI) today (8/7) is expected to be in the range of 4,950pt – 5,050pt with investors remain cautious in stance for 2Q20 earnings release. Meanwhile, yesterday (7/7) in Wall Street the DJIA ended lower by 397 points or 1.5% at 25,890pt, while the S&P500 and the Nasdaq both ended also weakened by 1.1% and 0.9%, respectively, mostly on profit-taking following a 2-days previous hike.
𝐈𝐧𝐝𝐨𝐧𝐞𝐬𝐢𝐚 𝐂𝐨𝐧𝐬𝐮𝐦𝐞𝐫 𝐒𝐞𝐜𝐭𝐨𝐫, 𝐛𝐞 𝐢𝐧 𝐞𝐯𝐞𝐫 𝐦𝐨𝐫𝐞 𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐜𝐞 𝐝𝐮𝐫𝐢𝐧𝐠 𝐭𝐡𝐞 𝐂𝐨𝐯𝐢𝐝-𝟏𝟗 𝐰𝐨𝐫𝐥𝐝 𝐜𝐫𝐢𝐬𝐢𝐬
During the current world crisis caused by the plague of Covid-19 virus, domestic consumer sector is the first and a downright shield toward recession, in our view. Indonesia is still being included in the “ developing-country”, as indicated by level of per capita income, literation rate, number of hospital bed , doctors and other health facilities per 1 million population, milk consumption / capita, flour consumption / capita, car ownership / capita, and other welfare indicators, but Indonesia consumer sector has unique and positive traits compared to other countries in general , 2 (two) of which are described below.
Traditional market (“Pasar”), as opposed to modern market (supermarket, hypermarket, mini-market, department store) accounts for higher portion of some 55% (source: interview with producers) of total products dispersed to reach end customers. Merchants in traditional market usually operate on owned-equity , mostly sell groceries and clothes. Combined with local spending pattern (consumption 65%, saving 15%, debt payment 20%), also by means of effective policies by the government, consumptions is expected to be robust regardless of global crisis.
As economic development progress, the concept of traditional market later on extended into a stall called “Warung”, traditional kiosks that exert its presence even more closer to end customers and into urban live as demand exists.
Furthermore, along with global growth so far, Indonesia consumer sector has achieved significant progress in terms of sophistication of products and systems. At present, a significant portion of “Warung” in the Java Island is connected with electronic payment systems for various kind of payment. According to Medium & Small Scale Industry Ministry, current number of “Warung” in Indonesia is at 3.5mn stalls.
FB producers have so far accommodated the above features into their marketing strategies , we observed, as most of “Pasar” and “Warung “offer competitive prices as compared to those of modern market. We suggest that stable and conducive interaction among retail consumers with “Pasar” and “Warung”, is expected to help contribute to stability of Indonesia consumer market.
The above brief on Indonesia consumer sector unique traits should put some optimism that the sector is able to play its important role to optimally prevent recession in time of severe crisis.
At the other end, yesterday the WTI price closed lower at USD40.5/barrel, or by 0.3%, and the USDIDR closed at IDR14.556 vs. IDR14.547 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,