Today’s Outlook:

• The closing of the US market due to the Juneteenth holiday did not make investors lose their way. The day before Nvidia’s share price rose more than 3% to USD 135.58/share, pushing its market capitalization to USD 3.34 trillion and reigning as the highest value company in the world, beating Microsoft with a market value of USD 3.31 trillion. Today it is the turn of Asian market players who will initially focus on the central banks of CHINA & INDONESIA where both countries’ central banks will decide on policies related to interest rates today. The PEOPLE’S BANK OF CHINA is likely to keep its benchmark interest rate unchanged, after keeping its benchmark borrowing cost or medium-term lending rate in place earlier this week. China is still faced with sluggish economic indicators and activity; the pressure to ease monetary policy going forward appears to be mounting. A survey of economists polled by Reuters expects BANK INDONESIA to also hold interest rates unchanged at the current 6.25% level, although the market is quietly preparing itself for a possible “surprise” rate hike of 25-50bps in the central bank’s efforts to stabilize the Rupiah which has (briefly) been entrenched at IDR 16489/USD, a 4-year low exactly when the COVID-19 pandemic began in March 2020. The weak exchange rate has prevented Indonesia from enjoying the bullish financial market mode experienced by other Asian market investors, when they enjoyed the rise of stocks to 2-year highs, which was supported by a strong Technology sector as well as positive regional market sentiment regarding the prospect of monetary policy easing. For example, the MSCI Asia ex-Japan has risen 1% to its highest level since April 2022, and the MSCI World index hit a record high.
• INDONESIA TRADE BALANCE: recorded a surplus in May 2024 of USD 2.93 billion, which is a surplus for 49 consecutive months since May 2020. This surplus figure soared 585.86% compared to the same month in 2023 amounting to USD 427.2 million and increased 7.72% compared to April 2024 which was valued at USD 2.72 billion. The surplus was supported by Exports surging 13.82% compared to April ’24, although May Imports also turned out to be up 14.82% compared to April.
• OTHER ECONOMIC INDICATORS: UK recorded May Inflation up 2.0% yoy, in-line with expectations which eased from the previous month at 2.3%. In the afternoon the BANK OF ENGLAND will follow with a rate decision which is predicted to remain the same at 5.25%. Later tonight the US will unveil housing sector data such as Building Permits & Housing Starts (May), as well as the weekly Initial Jobless Claims with predictions of 235k jobless claims (vs previous 242k); plus the Philadelphia Fed Manufacturing Index (Jun) which will shed light on general business conditions in the Philadelphia region gathered from the views of 250 manufacturers in the region.
• COMMODITIES: Crude OIL prices weakened on Wednesday trading (19/06/24), as an unexpected jump in US crude inventories raised concerns of over-supply at a time of sluggish demand. Both US WTI and BRENT futures traded 0.2% lower, at USD 80.52/barrel and USD 85.13/barrel, respectively. US crude stockpiles rose by 2.26 million barrels in the week ended June 14, according to data from the American Petroleum Institute, released late Tuesday. This figure was 180 degrees opposite to analysts’ forecasts that there would be a 2.2 million-barrel decline in crude stocks. Official US oil stockpile figures from the Energy Information Agency (EIA) will be released tonight, a day later than usual due to a US holiday.
• JCI tested the mid-term support level of 6700 for the second time, in order for the market to adjust after the long weekend Eid al-Adha holiday. RSI which has entered Oversold territory slightly raises the chance of a technical rebound in the near future, although this hope must be faced with the reality of unending foreign selling, monitored at IDR 709.78 billion in yesterday’s trading. NHKSI RESEARCH feels it is necessary to emphasize the possibility of interest rate decisions beyond market predictions, so investors/traders are advised to prepare themselves for high volatility.

Company News

• TLKM: Investasi IDR 1.4T Buat Pusat Data AI di Batam
• TKIM: Sepakat Bagikan Dividen IDR 77.8M
• GOLF: Incar IPO IDR 713M, Pasang Harga Segini

Domestic & Global News
Rupiah Melemah, Pengusaha Resah Dampak ke Kinerja Perusahaan
Industri Perkapalan Mendesak Tindakan di Laut Merah setelah Houthi Tenggelamkan Kapal Kedua

Download full report HERE.