Weekly Market Review (2 January 2019) - What happened & What's next?
- Global market recovered slightly after concerns over Fed Chairman, Jerome Powell, position won’t be affected amid President Trump’s criticism over the rate hike that spurred his thought to remove Powell. The fading concerns over US government shutdown also calmed the market selloff. On Wednesday 26 Dec, Dow Jones Index (DJI) soared more than 1,050 points (+4.98%) intraday, while S&P 500 climbed 117 points (+4.96%), both posting the biggest point gain in history, recovering from the sharp selloff on the previous day. On WoW basis, DJI and S&P 500 recorded 2.1% and 2.2%, respectively. On the domestic side, quite trading volume and year end window dressing led to JCI +0.5% WoW gain to 6,194.5. Mining sector became the most outperformed sector by gaining +3.0% WoW driven by mainly gain on BYAN, while Basic Industry delivered +2.3% WoW on the back of rising poultry price heading to end of 2018. Meanwhile, Miscellaneous sector declined the most by -1.8% WoW as weak outlook for coal becomes a pushback for ASII’s exposure to coal through UNTR. Newsflows to be watched within this week include China BoP; US existing home sales, New Home Sales, manufacturing PMI and initial jobless claim.
- IDR was relatively flat at -0.1% WoW to IDR14,568, relatively worse compared to other emerging market currencies. On the other hand, DXY fell to 96.4 (-0.6%WoW).
- Amid thin market volume, Indonesia bond market yield increased by 2-4 bps. Total volume for last week was only 8.47 T, lower than YTD average of 18.2T. 20 years series increased the most.
- Government will offer conventional and Islamic notes, as well as project-based sukuk in auctions between January and March. Government set IDR 389 T of net target issuance for 2019, and IDR 825.7 T rupiah in gross issuance. Gross issuance target slightly increased from 822.23 T in 2018.
- Trump’s advisor highlighted that Fed’s Chairman job is ‘100% percent’ safe despite Trump’s criticism over the rate hike.
- US-China trade talks seem to continue with US delegation travelling to Beijing in the coming weeks to held trade talk.
- US core PCE for Nov’18 rose 0.1%MoM, below 0.2% estimate.
- Ministry of Finance shows budget revenue realization in 2018 at Rp1,896tn or 100.1% of target. Separately, budget expenditure marked Rp2,154tn or 97% of Rp2,220.7tn target. With the posture, the budget deficit was recorded -1.72% of GDP, the lowest since 2012. Additionally, primary balance recorded surplus of Rp4.1tn, the first surplus since 2011 (Rp8.7tn).
- PGAS signed $1.35bn deal to acquire 51% stake of Pertagas that includes additional 4 other subsidiaries.
Foreign net purchases of Indonesia equities