Weekly Market Review (16 July 2018) - What happened & What's next?
- JCI rebounded sharply last week, gaining 4.4%WoW to 5,944.1 as foreign finally turned net buyer of USD47mn during the week. Trade war issue remains a concern, but the market seems priced in the previously tariff announcement by US-China. Regional market was also positive where Dow Jones rose 2.3%WoW. Miscellaneous sector was the most performing sector, gaining 7.3%WoW supported by strong rebound in ASII (+7.9%WoW). This week, markets awaits for US industrial production data and Bank Indonesia reference rate decision.
- IDR was stable at Rp14,378/USD. IDR was generally in line with other emerging market currencies; meanwhile, DXY was up by 0.8%WoW.
- Bond market traded firmer last week ahead of Fed Reserve Jerome Powell’s testimony this week. Bond market yield decreased by 9-13 bps. 10 years series decreased the most from 7.55% to 7.41%. This made the spread between 10 and 5 years series flatten to 7 bps from 40 bps 1 year historical average.
- Foreign investor continued to accumulate position by Rp3.84tn, focused on 10 years benchmark series.
- Concern about trade wars made 10 years US Treasury yield stabilize at 2.83- 2.87%. Market still wait and see ahead Federal Reserve Chairman Jerome Powell’s testimony on US economy and monetary policy.
- US CPI rose 0.1%MoM and 2.9%YoY in Jun-18, and were in line with market expectation.
- US Initial jobless claims decreased to 214k from previous 231k, this was slightly below market expectation of 225k.
- China forex reserves stood at USD3,112bn at the end of Jun-18, higher than consensus expectation and the previous month level.
- China recorded a trade balance surplus of USD41.6bn, higher than market expectation of USD27.7bn.
- China’s 2Q18 GDP slowing to 6.7%YoY from 6.8% in the previous quarter, but this was already expected by the market.
- Indonesia recorded a trade balance surplus of USD1.7bn in Jun-18, higher than the market expectation of USD968mn, this was positive for the market after two month substantial deficit in Apr and May.
- Government of Indonesia finally gets majority stake in Freeport Indonesia through SOE Inalum.
- 1H18 indicative 4W wholesale volume reached 553.8k units, +4%YoY.
Foreign net purchases of Indonesia equities