Weekly Market Review (12 Feb 2018) - What happened & What's next?
- With continued volatility on global market, JCI dropped 1.9%WoW, closed at 6,505.5 last week and foreign selling intensified with USD396mn outflow. Concerns on faster than expected US inflation which triggered a rise in US treasury yield brought down Dow Jones fell 5.2% during the week. Miscellaneous industry and mining sector was the most underperforming during the week, declined 5.4% and 5.0% respectively. Meanwhile, consumer was the most performing sector (flat week on week) due to its defensive characteristic. This week, market awaits for US January inflation data, Indonesia trade balance data and reference rate decision.
- IDR depreciated by 1.3%WoW to Rp13,628/USD last week, relatively in line with most of emerging market currencies that were weakening against USD (DXY index increased 1.4%).
- Selling pressure from both foreign and domestic still continues, Bank Indonesia and local names start to buy on Friday and stabilize 10 year yield on 6.35% from 6.28%.
- Risk off tone also drove 10 year US Treasury at 4 years high on 2.85%.
- U.S. trade deficit expanded more than expected in Dec at USD53.1bn (vs consensus at USD52.1bn), its highest level since 2008 driven by robust domestic demand.
- China’s forex reserves rose for a 12th straight consecutive month in Jan-18 to USD3,161.5bn as Yuan strengthened and economic outlook improved. This came in slightly below than Bloomberg consensus estimation at USD3,170bn.
- China recorded a trade balance surplus of USD20.34bn in Jan-18, lower than consensus expectation of USD54.6bn.
- Indonesia 4Q17 GDP growth came in 5.19%YoY, higher than market expectation of 5.1%YoY that was mostly driven by better than expected private consumption and gross fixed capital formation.
- Indonesia accumulated additional USD1.78bn of forex reserves during Jan-18 and reached USD131.98bn thanks to higher proceeds from oil and gas exports.
- Indonesia Current Account Deficit (CAD) widened to USD5.8bn or about 2.2% of GDP in 4Q17 that was mostly driven by lower surplus on the goods account. This brought FY17 CAD at 1.7% of GDP.
Foreign net purchases of Indonesia equities