Indonesian government looking to sell Samurai and Eurobonds in the second semester (2H) of 2020 to fund the fiscal deficit, said finance ministry' official on Thursday (06/04) - Photo by ING

JAKARTA (TheInsiderStoris) – Good morning. The Rupiah started the week with a loss as investors stay risk-averse due to escalating trade tensions even as Indonesia recorded a surprise trade surplus in September. The rupiah ended at 15,246 per US$1 on Monday (15/10) versus 15,194 per US$1 on Friday (12/10).

Indonesia recorded trade surplus of $230 million in September, swing from a deficit of US$1 billion in August as imports fell more than exports. The result is seen positive by market investors especially those monitoring Indonesia’s widening current account deficit, which already reached 3 per cent of gross domestic product in the second quarter.

The surplus can also be attributed to the government’s policy measures to offset Rupiah fall, including curbing imports of capital and consumer goods. However, market sentiments are still largely negative mostly due to external development.

The escalating trade tension between the United States and China, the higher possibility of no-deal Brexit and geopolitical tension related to allegations that Saudi Arabia had murdered a well-known journalist were the underlying market sentiment today.

Domestically, the government’s move to raise the rupiah assumption in the 2019 state budget to 15,000 per US$1 from previously 14,500 per US$1 may push the local unit into the downside. One consequence of the higher Rupiah assumption is the increase in energy subsidy cost in 2019, which is now estimated at Rp164.1 trillion versus Rp157.8 trillion earlier.

Stock market also recorded a loss, falling 0.5 per cent to 5,727. Foreign investors were starting to buy selectively ahead the corporate earning season and net bought stocks worth Rp340 billion (US$23.45 million).

Another key data point that would affect market movement today is the wholesale car sales, which was reported falling to 93,103 units in September from 102,197 units in August. Car sales data is an indicator of the economy’s health Indonesia, where household consumption account for more than half of the GDP.

However, local financial market may find little supports on Tuesday due to sluggish US retail sales, which grew 0.1 per cent on month in September, lower than the market consensus.

Shares of Lippo Group companies would see some pressures also after reports that some of its key executives were arrested on bribery charges related to the construction of mega project Meikarta. The arrest would raise further doubts of the viability of the property project, which has many doubters due to the sheer scale of its ambitions.

The arrest could also serve as a political fodder for the opposition camp as Lippo Group is closely associated with President Joko Widodo.

The political scene was rather quiet at the moment, with both sides of the camps are debating rhetoric on the difference between negative campaign and black campaign. This came after a politician from the opposition’s prosperous justice party said negative campaign is a justified strategy.

The ruling coalition was quick to chime in, exploiting into a recent blunder by the opposition by trusting a false allegation against the government.

May you have a profitable day.

US$1: Rp14,500

Written by TIS Intelligence Team, Website: