20 July 2020
Source: Stock exchanges of India, Indonesia, Korea, Philippines, Taiwan, Thailand, Malaysia, Singapore, Hong Kong and Japan
- Global indexes were mixed at the end of last week as investors weighed the possibility of increased tension between US-China, rising coronavirus cases and mixed economic data. US indexes continued its third consecutive weekly gain but most Asians’ stock ended the week with loss. US retail sales and Philadelphia index beating consensus’ expectation. However, weekly jobless claims showed a more muted recovery. US consumer sentiment also backslides in Jul-20 as new coronavirus outbreaks alarms Americans. Investors were also disappointed by weak China’s consumer data, retail sales data, dropped by -1.8% YoY. On a separate note, Trump administration is weighing a ban that would prevent members of the Chinese Communist Party and their families from traveling to the U.S., while the Trump administration said Wednesday that it would ban travel for employees of Chinese technology group Huawei and other companies it deems complicit in helping Beijing crack down on human rights in the country. China recently imposed travel restrictions on some U.S. officials, including Sens. Marco Rubio and Ted Cruz. On the domestic side, JCI closed higher, up by +1.0% WoW. The most outperformed sectors were miscellaneous industry and agriculture, up by +6.0% WoW and +5.7% WoW respectively. CPO stocks experienced rally on the back of higher CPO price. On the other hand, the most laggard is property sector, down -2.1% WoW. News flows within this week: US initial jobless claims and US PMI.
- Rupiah depreciated by -1.9% WoW to USD/IDR 14,703, the worst performing currency in EM. DXY index also weakened by -0.7% WoW to 95.9.
- Indonesian government bonds’ yield declined in average by 5 bps along the curve with 1-5 years bucket decreased the most. BI decision to cut its benchmark rate by 25 bps to 4% was as expected, hence no price movement occurred after the decision.
- Tuesday conventional auction remained solid with demand reported at IDR 61.2tn (vs IDR 72tn on the previous auction). Government issued IDR 22tn vs IDR 20.5tn on the previous auction.
- Foreign ownership increased by IDR 2.79tn over the week to IDR 937.59tn.
- Concern on rising Covid-19 cases and increasing tension between US-China added pressure on EM asset classes. Yet, better than expected US retail sales gave positive sentiment. 10 year UST closing the week at 0.64% (-1bps WoW).
- US CPI jumped by 0.6% Jun-20, mainly due to higher gasoline price as oil prices continued to rebound from a multi-year low. Strips out volatile gas and food prices, core CPI increased by 0.2