Wall Street June 7, 2019

𝐉𝐮𝐧𝐞 𝟖, 𝟐𝟎𝟏𝟗

* 𝐃𝐉𝐈𝐀 𝐜𝐥𝐨𝐬𝐞𝐝 𝐡𝐢𝐠𝐡𝐞𝐫 𝐛𝐲 𝟐𝟔𝟑𝐩𝐭 𝐨𝐫 𝟏.𝟎%  𝐚𝐭 𝟐𝟓,𝟗𝟖𝟒𝐩𝐭 𝐨𝐧 𝐅𝐫𝐢𝐝𝐚𝐲 (𝟕/𝟔)

* 𝐓𝐡𝐞 𝐉𝐂𝐈 𝐰𝐢𝐥𝐥 𝐫𝐞𝐬𝐮𝐦𝐞 𝐭𝐫𝐚𝐝𝐢𝐧𝐠 𝐨𝐧 𝐌𝐨𝐧𝐝𝐚𝐲, 𝐉𝐮𝐧𝐞 𝟏𝟎

Afternoon,

Wall Street extended gain yesterday (7/6) following the release of employment   report whereby the US economy added 75,000 jobs in May, below expectation of 180,000, and marking the second straight month of monthly jobs growth below 100,000.

Friday closing, the DJIA was up by 263pt higher at 25,984pt, led by gains in Microsoft and Apple. The S&P500 index  climbed 1% to 2,873pt as the tech sector outperformed, while the Nasdaq Composite gained  by 1.7% to 7,742pt

At the other end, commodity WTI price closed with a gain of 2.7% at USD54.0/barrel, following a statement from member Saudi Arabia   that OPEC was close to agreeing to extend an output production cut beyond June. Saudi Energy Minister mentioned that OPEC was close to agreement, but more talks were needed with non-OPEC countries that had been part of the deal to reduce output by 1.2 million barrels per day (bpd) agreed in December OPEC meeting, which runs out at the end of this month.

Meanwhile, the Indonesia  Stock Exchange will resume trading the day after tomorrow, Monday June 10. Given the latest development now, the JCI is expected to hover in the positive territory on Monday,  tracking regional sentiments as well as catching up valuations.

Cheers,

𝐓𝐡𝐞 𝐉𝐂𝐈

𝐌𝐚𝐲 𝟐𝟗 𝐜𝐥𝐨𝐬𝐢𝐧𝐠 𝐚𝐭 𝟔,𝟏𝟎𝟒𝐩𝐭, +𝟏.𝟐%

Afternoon,

Against our and consensus’ estimates, the Jakarta Composite Index opened in the green and moved its way up to close by 71poins or 1.2% higher to 6,104pt. Investors’ perception on Indonesia political climate has been the trigger factor, in our view. The government is perceived to be in control over rival Prabowo-Sandi supporters’ protests on election frauds, with medias reporting that the police has actively arrested those who are presumed assaulting the incumbent president and his allies. Presidential election fraud charges were submitted by the Prabowo-Sandi team to the Constitutional Court on May 24, while decision on the case will be announced on June 28.

Meanwhile, counters under our coverage that experienced significant rebound on May 29, include those of TKIM at IDR9,000  (+IDR800 or 9.8%), UNVR at IDR43,500 (+IRD1,000 or 2,4%), MAPI at IDR880 (+IDR40 or 4.8%), and ASII at IDR7,200 (+IDR125 or 1,8%). On May 29 the last trading day before Eid long holiday, foreign net buy was recorded in the amount of IDR332bn and trading value of Indonesia equities reached IDR10.8tr.

At the other end, Wall Street underwent another slide on May 29 with the DJIA closed by 221pt lower or 0.9% to 25.126pt mainly to continue reflecting investors’ worry on the trade war between the US and China which officially started early December last year. Contrary to consensus’ belief at the time, China has not acted strategically and would go steps further to ensure trade deal is fair. For example China threatened it would cut off rare earth minerals as a countermeasure in the escalated trade battle. The materials are crucial to the production of iPhones, among others. The official newspaper of the Communist Party of China, People’s Daily, wrote in its commentary column the following title,  “We advise the U.S. side not to underestimate the Chinese side’s ability to safeguard its development rights and interests. Don’t say we didn’t warn you!”

Cheers,