Weekly Market Review (6 Feb) - What happened & What's next?
- JCI gained 0.9%WoW to 5,360.8 last week following two consecutive weeks of foreign inflow (USD53.5mn). Regional market was relatively flat (Dow was -0.1%WoW), but hovered by uncertainty from Trump’s refugee ban and protectionist rhetoric. On sector basis, mining was the leading sector for the week, rising 3.1%WoW that was boosted by INCO (+18%WoW) from Philippines’ plan to suspend half of its nickel mining operation. This week, market awaits for Indonesia foreign reserves data and balance of payment.
- IDR was slightly appreciated by 0.1% against USD, but it underperformed other EM currencies.
- 10 year Indonesia government bond yield decreased slightly from 7.59% to 7.56%. Although there was increased interest from foreign and local investor, bond market transaction still printed a relatively low numbers as shown by lower than year to date average trading volume. Stable IDR currency and attractive real yield could be the reason for increased interest from investors. Last week, the most traded series were the 5yr and 10yr series.
- US non-farm payrolls for Jan 2017 add 227k jobs (consensus 177k) but average hourly earnings eased to 0.1% MoM and unemployment rate rise to 4.8%. The data was mix and decreases the probability of Fed rate hike in March from 32% to 28%. US Treasuries was flat last week at the range of 2.45-2.49%, while the Dollar index (DXY) weakened by 0.54%.
- China Caixin manufacturing PMI for the month of Jan came in at 51, below consensus expectation of 51.8.
- US non-farm payrolls for January was very strong at 227k, well above market expectation of 180k. On the other hand, US unemployment rate slightly ticked up to 4.8% from 4.7% in the previous month, while wage growth slowed to 0.1%MoM, from 0.4% in the previous month.
- FOMC delivered consensus expectation for no rate hike and a little changed statement.
- Indonesia January inflation was 0.97%MoM, higher than consensus expectation of 0.71%. This brought Jan YoY inflation at 3.49%.
- Indonesia PMI in Jan increased to 50.4 from 49 in the previous month.
- Nielsen research stated FY16 gross national advertising expenditure grew by 14%YoY mostly driven by TV adex growth of 22%YoY.
- Indonesia GDP growth slowed to 4.9%YoY in 4Q16 from 5% in 3Q16; this was slightly below consensus expectation of 5%.
Foreign net purchases of Asian equities