Weekly Market Review (27 December 2017) - What happened & What's next?
- JCI continued its positive performance, gaining 1.7%WoW last week and closing at 6,221 that was driven by Indonesia rating upgrade from Fitch to BBB; foreign investor turned to net buyer with USD39.6mn of inflow during the week. Consumer and finance were the leading sector, increased by 3.9%WoW and 2.4%WoW respectively; while, agriculture was the most underperforming sector for the week, declined by 2.4%WoW with continued pressure on CPO price (-0.6%WoW). On the other hand, regional market was still on tax reform euphoria where Dow Jones rose 0.4%WoW. This week, there is limited catalyst and markets awaits for a possibility of year-end window dressing.
- IDR slightly appreciated by 0.1%WoW to IDR13,556/USD, slightly underperforming peers. On the other hand, Dollar currency index declined 0.6%WoW.
- After Fitch Rating upgraded Indonesia sovereign rating to BBB, IDR bond market yield decreased by 8-15 bps. Foreign investor continue to add IDR bond holdings by approximately Rp640 bn. 10 years yield decreased from 6.46% to 6.31% while 20 years yield decreased from 7.24% to 7.16%.
- Fitch upgraded Indonesia rating to BBB driven by macro stability, rising FX reserves, and strong economic drivers.
- China industrial profit increased by 14.9%YoY in Nov-17; this was lower than Oct-17 number at 25.1%YoY.
- US new home sales in Nov-17 rose to its highest level in more than 10 years to 733k units, this came in above estimates at 655k units.
- The Financial Services Authority (OJK) remains optimistic on the global and domestic economy for next year and targets 10-12% of lending growth in 2018. As of Nov-17, loan growth was at 7.47%YoY.
- Fitch Ratings has upgraded Indonesia’s long-term foreign- and local-currency issuer default rating to ‘BBB’ from ‘BBB-‘ with ‘Stable’ outlook. The upgrade reflects Indonesia’s stronger resiliency towards external shocks, higher FX reserves, and stronger macro stability.
Foreign net purchases of Indonesia equities