JCI’s Mixed Movements
Global and domestic sentiments affected JCI’s last-week movements. The escalating tension between the U.S. and Iran after an attack on two U.S. oil tankers in the Gulf of Oman ebbed global crude prices, crumbling to a lower level as Saudi Arabia blamed Iran for the attack. That global sentiment drove JCI lower. On Monday (06/17), JCI was at the tepid close of 0.96% due to the trade disputes between the U.S. and India. India’s retaliatory tariffs against the U.S. goods as the U.S. imposed higher levies on India’s steel and aluminums’ derivative products. The tit-for-tat tariffs exacerbated investors’ anxieties about the U.S. trade measures against its trade partners and heightened the global economic gloom. In contrast to the negative tit-for-tat sentiment, Trump and Xi meeting at the G-20 rising investors’ optimism about mutual trades between the two economic powerhouses proved an external boost for JCI movement. Domestic sentiments were April’s 8.7% y-y gains in Indonesian private sectors’ external debts and April’s 3.4% y-y lagging growth in the Indonesian government’s external debts, lower than March’s 3.6% y-y. That positive sentiment portrayed the private sectors’ expansive growth because the sectors posted more capital spending. In last week’s mid days, JCI was rebounding at 1.08% as rupiah was appreciated as declines in global crude prices suppressed Indonesia’s current account deficits. I’s stance of maintaining BI-7DRRR at 6% following the Fed’s dovish stance of holding FFR at 2.25%-2.5% was a positive catalyst for JCI. On Friday (06/21) JCI was at a tepid close as the Finance Ministry recorded May’s state budget (APBN) deficits of IDR127.45 trillion, higher than deficits of IDR93.51 trillion in the same period of 2018.
Download full report HERE.