Next Week Market Sentiment
Jakarta, CNBC Indonesia – The financial market in Indonesia this week tends to be less encouraging, because the market is again worried about the attitude of the United States (US) central bank hawkish in the next few months.
Launch data RefinitivDuring the week, the Composite Stock Price Index (IHSG) recorded a decline of 0.57% and closed at 6,856.58. This week, JCI still tends to stay at the psychological level of 6,800.
In the five trading days this week, JCI only strengthened on Thursday and Friday trading, while the rest weakened. In fact, during trading on Wednesday this week, the JCI had fallen by almost 1%.
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Indonesia Stock Exchange (CNBC Indonesia/Tri Susilo) |
Market data shows that foreign investors have recorded net selling of IDR 303.2 billion in all markets this week.
Meanwhile, the rupiah also suffered the same fate, namely not being strong against the United States (US) dollar this week. The rupiah weakened 0.13% on an ongoing basis point-to-point (ptp) to a position of IDR 15,220/US$.
The IHSG and rupiah tended to be less encouraging, one of which was caused by investors who were worried about a global recession due to the US central bank’s (Federal Reserve/The Fed) monetary policy which was still hawkish.
The Fed officials in their latest meeting minutes indicated that there will be further rate hikes.
The meeting minutes stated there were signs inflation was falling, but not enough to offset the need for further rate hikes.
Several members said they wanted a half point, or 50 basis point (bp) increase. Such an increase will show greater determination to reduce inflation to the set target.
“Inflation remains well above the Fed’s target of 2% as the labor market remains very tight, contributing to continued upward pressure on wages and prices,” the minutes said.
On the other hand, domestically, Bank Indonesia (BI) recorded a significant increase in the current account surplus in 2022 reaching US$13.2 billion or 1.0% of the Gross Domestic Product (GDP). This surplus figure is higher than the surplus achieved in 2021 of USD 3.5 billion or 0.3% of GDP.
The Head of the BI Communication Department, Erwin Haryono, said that this performance was mainly supported by an increase in exports in line with high global commodity prices and demand for Indonesian commodities which remained good, amidst imports which also increased in line with the improvement in the domestic economy.
The balance of payments as a whole in 2022 again posted a surplus of US$4.0 billion, after recording a surplus of US$13.5 billion in the previous year.
In line with this, the current account at the end of the fourth quarter also recorded a surplus of US$4.3 billion or 1.3% of GDP, but the surplus achievement slightly slowed in the previous quarter of US$4.5 billion or 1.3% of GDP.
The strengthening of the rupiah was not too large because even though the current account was a surplus which was supported by a trade balance which was a surplus for 33 consecutive months, the export proceeds (DHE) were not in the country. That is, on paper there is a surplus, but the money is abroad.
