Weekly Market Review (23 Oct) - What happened & What's next?
- Foreign has not stopped to be net seller with USD183mn of outflow last week, yet JCI remains largely unchanged (0.1%WoW) to 5,929.55 with limited catalyst on the market. On the contrary, regional market soared into a new record (Dow Jones closed above 23,000 for the first time, 2.0%WoW) that was partly driven by good results. In JCI, miscellaneous sector was the most underperforming sector, lost 4.3%WoW driven by ASII (-5.6%WoW); meanwhile, mining sector was the most performing sector, gaining 2.7%WoW lifted by ITMG (+7.5%WoW) and HRUM (+5.8%WoW). This week, market awaits for domestic 3Q result, US 3Q GDP growth data, ECB’s policy on assets purchase, and news flow on new Fed chairman.
- IDR slightly depreciated 0.2% for the week, closing at Rp13,519/USD, in line to other emerging currencies due to strong USD (DXY index increased by 0.66% last week).
- Higher global yield and stronger USD had increased IDR bond yield by 5-10 bps across the curve. Market volume is still muted and investor are still waiting for the next US tax reform progress. 10 years yield increased from 6.54% to 6.61% and 20 years yield increased from 7.31% to 7.34%.
- US Treasury yield increased from 2.28% to 2.39% last week as the Republican senate approves USD4 trillion budget blueprint, taking a crucial step toward passing a tax plan this year.
- US existing home sales for the month of Sep-17 stood at 5.39mn, higher than consensus estimate of 5.3mn.
- China Sept-17 inflation was 1.6%YoY, in line with consensus expectation.
- China 3Q GDP growth was 6.8%YoY, lower than the previous quarter growth of 6.9%, but in line with market expectation. Retail sales and industrial production in Sept-17 were slightly higher than market anticipated at 10.3% and 6.6% respectively.
- Shinzo Abe’s Liberal Democratic party is predicted to win the majority of the lower parliament seats which paved the way for Abe’s administration to continue in 2018.
- Indonesia recorded 6-year high of USD1.76bn trade balance surplus in Sept-17, reflecting a healthy global and domestic environment where export grew by 15.6%YoY while import grew by 13.1%YoY. Export was driven by volume (+9.3%YoY), while price (+10.9%YoY) was more prominent of an effect to import.
- Bank Indonesia kept its reference rate unchanged at 4.25% during its monthly meeting which was expected by the market participant post its 50bps YtD cut.
Foreign net purchases of Indonesia equities