The JCI January 12, 2021

𝐉𝐚𝐧𝐮𝐚𝐫𝐲 𝟏𝟐, 𝟐𝟎𝟐𝟏

* 𝐓𝐡𝐞 𝐉𝐂𝐈 𝐭𝐫𝐚𝐝𝐢𝐧𝐠 𝐫𝐚𝐧𝐠𝐞: 𝟔,𝟑𝟐𝟓𝐩𝐭 – 𝟔,𝟒𝟕𝟓𝐩𝐭 (𝐘𝐞𝐬𝐭𝐞𝐫𝐝𝐚𝐲 𝐜𝐥𝐨𝐬𝐞: 𝟔,𝟑𝟖𝟑𝐩𝐭)

* 𝐖𝐚𝐥𝐥 𝐒𝐭𝐫𝐞𝐞𝐭 𝐜𝐥𝐨𝐬𝐞𝐝 𝐬𝐥𝐢𝐠𝐡𝐭𝐥𝐲 𝐥𝐨𝐰𝐞𝐫 𝐢𝐧 𝐫𝐞𝐭𝐫𝐚𝐜𝐞𝐦𝐞𝐧𝐭 𝐚𝐟𝐭𝐞𝐫 𝐫𝐞𝐜𝐨𝐫𝐝-𝐡𝐢𝐠𝐡𝐬 𝐭𝐡𝐞 𝐩𝐫𝐞𝐯𝐢𝐨𝐮𝐬 𝐝𝐚𝐲𝐬

* 𝐓𝐡𝐞 𝐉𝐂𝐈 𝐢𝐬 𝐞𝐱𝐩𝐞𝐜𝐭𝐞𝐝 𝐭𝐨 𝐜𝐨𝐧𝐬𝐨𝐥𝐢𝐝𝐚𝐭𝐞 𝐚𝐧𝐝 𝐬𝐮𝐩𝐩𝐨𝐫𝐭𝐞𝐝 𝐛𝐲 𝐬𝐭𝐚𝐛𝐥𝐞 𝐔𝐒𝐃𝐈𝐃𝐑 𝐚𝐧𝐝 𝐨𝐨𝐢𝐥-𝐜𝐥𝐨𝐬𝐞

Morning,

The Jakarta Composite Index (JCI) today (1/12) is expected to be in the range of 6,325pt – 6,475pt, to fluctuate and to be supported by bargain hunters. Meanwhile, yesterday (1/11), the DJIA closed lower by 89 points or 0.3% to 31,009pt, while the S&P500 and the Nasdaq ended lower  by 0.7% and 1.3%, respectively.

𝐂𝐨𝐧𝐬𝐮𝐦𝐞𝐫’𝐬 𝐜𝐨𝐧𝐟𝐢𝐝𝐞𝐧𝐜𝐞 𝐬𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐢𝐬 𝐤𝐞𝐲

The JCI yesterday closed at its year-high at 6,383pt, to record a year-to date return of 6.8%. The hike yesterday was due to optimism trigerred mainly on higher consumer confidence index data for December last year, released the day before (1/10), we note.

Indonesia consumer confidence index (Indeks Keyakinan Konsumen or IKK) in December increased meaningfully to 96.5pt vs. 92.0pt in November. IKK is made up of 2 (two) components, of consumer confidence index on the perception of  current (1) economic condition, and of the expectation in the next 6 (six) months (2). The former is at 68.1pt in December vs. 60.1pt in November, while the later is at 124.3pt in December vs. 123.0pt in November.  Meanhile, during the 4Q20 IKK increased to 89.2pt vs. 85.5pt in 3Q20. Again, trending higher commodities’ price, COVID-19 vaccines program, as well as supporting monetary and fiscal policies are the main bases of the improved confidence , in our observe.

Also, consumers spending pattern are in-tact during the last survey. In December , portion of income for the use of consumption increased to 69.0% as compared to 68.8% in November, while debt to income ratio decreased to 10.2% vs. 11.8% in November, and the portion of income that goes to saving account increased to  20.8% as compared to 19.4% in November.  The December consumer survey implies that room for consumption to accelerates exist, should COVID-19 vaccines programs be successfully carried out.

𝐏𝐫𝐢𝐯𝐚𝐭𝐞-𝐜𝐨𝐧𝐬𝐮𝐦𝐩𝐭𝐢𝐨𝐧, 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭𝐬, 𝐓𝐫𝐚𝐝𝐞, 𝐚𝐧𝐝 𝐭𝐡𝐞 𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭

It is not exaggerated to say that a sustained consumer confidence is all that the Indonesian economy needs to recover, we observe, given the demographic profile and the nature of the economy. Consumer confidence was at its low last year, best represented by banks statistical data, in October 2020 .  As at of October last year, banks credit contracted at 0.47% YoY during the year while third-party-funds increased by 12.9% YoY.  Credit growth contractions occurred both on the lines of corporations and indivuals, in contrast with the situation of funding activities during the year.

Banks statistical data have been in-line with the results of consumer confidence survey naturally , given the fact that the bulk of the economy comes from private consumption. By survey,  in almost of a decade, consumers shift the spending from consumption into more of saving and debt repayment, in the event of slightest uncertainties.  This being said that, at present, as uncertainties in general is decreasing, economic growth is expected to accelerate.

At the other end, yesterday  the WTI price closed almost unchanged at USD52.3/barrel as compared  to USD52.2/barrel the previous close . Meanwhile, the USDIDR  closed  at IDR14,155  vs. IDR14,058 the previous one.

We advise the following recommendations, 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), 𝐒𝐈𝐃𝐎, 𝐔𝐋𝐓𝐉, 𝐔𝐍𝐕𝐑, 𝐈𝐂𝐁𝐏 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘊𝘰𝘯𝘴𝘶𝘮𝘦𝘳, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘖𝘷𝘦𝘳𝘸𝘦𝘪𝘨𝘩𝘵 ), 𝐚𝐧𝐝 𝐀𝐂𝐄𝐒, 𝐒𝐂𝐌𝐀, 𝐌𝐀𝐏𝐈,𝐌𝐍𝐂𝐍 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘛𝘳𝘢𝘥𝘦, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘖𝘷𝘦𝘳𝘸𝘦𝘪𝘨𝘩𝘵),𝐚𝐧𝐝 𝐓𝐊𝐈𝐌 (𝐬𝐞𝐜𝐭𝐨𝐫 𝐨𝐟 𝘉𝘢𝘴𝘪𝘤 𝘐𝘯𝘥𝘶𝘴𝘵𝘳𝘺, 𝐚𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧 𝐬𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧 𝘔𝘢𝘳𝘬𝘦𝘵-𝘸𝘦𝘪𝘨𝘩𝘵).

Cheers,