Weekly Market Review (4 December 2017) - What happened & What's next?
- JCI dropped 1.9%WoW last week, closing at 5,952.1 mainly due to MSCI rebalancing effect at the end of the month (on the 30th Nov, JCI dropped 1.8%), thus brought a total foreign outflow of USD661mn for the week (including around USD500mn of TOWR’s crossing). Regional market, on the other hand, remains very strong where Dow Jones soared 2.9%WoW due to higher probability of US tax reform prospect and strong US economy data. In JCI, miscellaneous sector was the most underperforming during the week driven by ASII which declined 6.7%WoW on MSCI rebalancing; meanwhile, mining was the most performing sector, gaining 0.6%WoW. This week, market awaits for US and China trade balance data as well as the progress of US Tax Reform plan.
- IDR slightly depreciated by 0.1%WoW to IDR13,523/USD, slightly underperforming peers. On the other hand, Dollar currency index increased by 0.11%.
- Bond market yield decreased across the curve by 5-6 bps driven by positive sentiments from MOF statement. MOF announced the cancellation of the two last bond auction this year. Foreign investor continue to add IDR bond holdings by approximately IDR 4 tn. 20 years yield decreased from 7.26% to 7.22% and 10 years yield decreased by 5bps from 6.53% to 6.48%.
- US Treasury yield increased from 2.34% to 2.37% driven by the positive progress of tax reform as Republicans senate already passed tax reform bill.
- China Caixin manufacturing PMI in Nov-17 fell to 50.8 from 51 in Oct-17, slightly below consensus at 50.9. This raised some concerns of a potential slowdown in China growth after the Party Congress ended.
- US new home sales unexpectedly surged in Oct-17 to 685k units, the highest level since Oct-07 and came in above estimates at 628k units.
- The US Senate passed its tax reform bill by a vote of 51-49. Previously, the House has also passed the tax reform bill, so both now need to reconcile and produce a single bill that they can each pass.
- Indonesia CPI in Nov-17 was 0.2%MoM and edged down to 3.3%YoY, these came in below market expectation of 0.29%MoM and 3.41%YoY respectively.
- Government tax collection as of 11M17 reached 77% of 2017’s target at Rp1,283tn, this is higher than 11M16 achievement at 71.2%.
- According to Energy and Mineral Resources Ministry, electrification ratio in Indonesia has reached 93.08% as of 9M17, already above the 2017’s target at 92.75%.
Foreign net purchases of Indonesia equities