The JCI June 3, 2020

Jᴜɴᴇ 3, 2020

* Tʜᴇ JCI ᴛʀᴀᴅɪɴɢ ʀᴀɴɢᴇ: 4,800ᴘᴛ- 5,000ᴘᴛ  (Yᴇsᴛᴇʀᴅᴀʏ ᴄʟᴏsᴇ:  4,848ᴘᴛ)

* Wᴀʟʟ Sᴛʀᴇᴇᴛ ᴇɴᴅᴇᴅ ʜɪɢʜᴇʀ ᴀs ʀɪsᴋ ᴀᴘᴘᴇᴛɪᴛᴇ ɪɴᴄʀᴇᴀsᴇᴅ, ꜰᴀᴄᴛᴏʀɪɴɢ ɪɴ ʙᴜsɪɴᴇssᴇs’ ʀᴇ-ᴛᴀᴋᴇ ᴏꜰꜰ

* Tʜᴇ JCI ɪs ᴇxᴘᴇᴄᴛᴇᴅ ᴛᴏ ᴇxᴛᴇɴᴅ ɢᴀɪɴ ʙᴜᴛ sʟɪɢʜᴛʟʏ ʀᴇsᴛʀᴀɪɴᴇᴅ ʙʏ ᴘʀᴏꜰɪᴛ ᴛᴀᴋɪɴɢ ᴀꜰᴛᴇʀ 5-ᴅᴀʏs ʀᴀʟʟʏ

Morning,

The Jakarta Composite Index (JCI) today (3/6) is expected to be in the range of 4,800pt – 5,000pt to extend gain although limited.  Meanwhile in Wall Street yesterday (2/6)  the  DJIA ended higher at 25,475pt or by  268 points or 1.1%  while the S&P500 and the Nasdaq both closed higher by 0.8% and 0.6%, respectively.

Meanwhile yesterday, Indonesia bond auctioned resulted in 5.2x oversubscribed, attracting total bid of some IDR127tr, the highest in history, as cited from the media, mostly credited to yield differential between Indonesia and other countries, in our view.  At present central bank Bank Indonesia and market consensus both agreed that the country is expected to post an annual positive GDP growth this year, against contraction in the neighboring countries.

Indonesia is strategically positioned to face this year economic challenges that arose from the Covid-19 pandemic, for several reasons. 1) Government aid for the pandemic to the population produced huge multiplier effects thanks to significant role informal economic sector, 2) prudent debt level both for country and household scale, 3) less reliance on international trade, 4) generally prudent and stable banking and monetary status that have been maintained for at least in the lastl five years .

At the other end, yesterday the WTI price closed stable  at USD36.8/barrel ahead of its OPEC plus countries meeting tomorrow. The organization is considering to extend production cut of 9.7mn barrels/ day or about 10% of total world  into July or August. Meanwhile the  USDIDR  closed higher at IDR14.502  vs. IDR14.733 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,