JAKARTA (TheInsiderStories) – Good morning. Today, Indonesian government will sign head of agreement (HoA) of PT Freeport Indonesia (PTFI) share sale with Freeport-Mcmoran Gold & Copper Inc (NYSE: FCX), finance ministry announced. Meanwhile, trade wars weakened major bourses as an escalating United States (U.S) – China threatening the country’s economic growth.
As the first stage, Inalum will acquire 40 percent interest in the giant Grasberg copper and gold mine in Papua from global miner Rio Tinto Group (ASX: RIO). Rio’s interest in Grasberg is estimating worth of US$3.5 billion.
For Rio, selling down its interest in Grasberg would allow the company to exit a challenging mining jurisdiction and focus on its core assets. It would also open Rio’s share register to investors who cannot invest in the company because of environmental concerns related to some of the processes used at Grasberg.
Yesterday U.S stocks lowered, ending a four-day winning streak after a the country threat to impose tariffs on Chinese goods worth $200 billion raised fears of a trade war.
The Dow Jones Industrial Average closed down 219.21 points, or 0.88 percen to 24,700.45, Standard & Poor’s 500 Index fell 19.82 points, or 0.71 percent to 2,774.02, and the Nasdaq Composite fell 42.59 points 0.55 percent to the level of 7,716.61.
China responded to President Donald Trump’s threat by accusing the United States’s intimidation and warned it would take a retaliation. Investors said fears of a trade war may be easing as they begin to focus more closely on second quarter earnings over the coming weeks.
The market decline is not as sharp as what was seen in late March and early April as the increasing trade rhetoric between China and the U.S caused S&P to fall more than 2 percent over four sessions.
The escalation of trade tensions between U.S and China also depressed European stock markets on Wednesday (11/07). The Stoxx Europe 600 Index ended the six-day winning rally after closing down 1.26 percent or 4.85 points to 381.40 while German DAX index closed down 1.5 percent.
At the same day, crude oil prices have fallen sharply in the past two years as an escalating U.S-China trade war. West Texas Intermediate crude for August delivery fell 5 percent or 3.73 points to as low as $70.38 a barrel on the New York Mercantile Exchange, the biggest decline since June 2017.
Brent for September delivery fell 7 percent, or 5.46 points, to end at $73.40 on the London-based ICE Futures Europe exchange. The global benchmark trades at a premium of $4.54 compared to WTI for the same month.
In recent weeks, Brent surpassed $79 per barrel and the U.S benchmark rose above $75 amid supply disruptions from Canada to the Persian Gulf. Meanwhile, an imminent return of exports from the eastern port of Libya adds to the downward pressure on oil prices.
Amid the weakening of global bourse, the Jakarta Composite Index (JCI) is predicted will still be able to survive today. On Wednesday, the JCI closed up 0.2 percent or 11.60 points to 5,893.36.
Hows about foreign exchange market? This morning, Indonesian Rupiah opened in negative territory, lowered 30 points or 0.21 percent at the level of Rp14.415 against the greenback.
Yesterday, Rupiah closed at Rp14,385 versus U.S dollar or down 18 points compared to previous day. Throughout the year, the rupiah recorded the weakest level at Rp14,453 on July 3, and the strongest level at Rp13,263 on Jan. 25.