JAKARTA (TheInsiderStories) – Good Morning! This week, Bank Indonesia (BI) hold a board of governor on Nov. 20 – 21 to decide their monetary stance in this month. In October the central bank make a fourth straight cut during this year, after decided cut the BI 7-Days Reverse Repo rate (BI-7DRR) by 25 bps to 5 percent.
The central bank also cut the Deposit and Lending Facility by 25 bps to 4.25 percent and 5.75 percent, respectively. IHS Markit sees the Bank could opt for a fifth consecutive cut given PMI warning of a further slowdown.
Globally, this week, Purchasing Managers Index (PMI) surveys provide the highlight of the economic calendar, with newly released United Kingdom (UK) PMI surveys. Key things to watch will be whether the manufacturing downturn is easing, or if the service sector is suffering spill-over effects from the weakened goods-producing sector.
From United States (US), Federal Open Market Committee appears satisfied that its third rate cut represented the end of its policy loosening. But mixed news from the PMIs data, particularly softening new service business growth and job losses raise expectations that more policy support could be necessary.
US’ PMI data will give a good insight into both GDP and employment growth in the fourth quarter. While, the eurozone service sector has shown more resilience. In Asia Pacific, the Japan PMI will give further insight into how the economy is faring after October’ sales tax hike, and whether Australia is slipping closer to stagnation.
Then, Thailand’ GDP is expected to pick up a little during the third quarter, but that will still be one of the weakest growth rates seen since the 2013 – 2014 political crisis.
Last weekend, defense minister of Indonesia, Prabowo Subianto, has met US’ secretary of defense Mark Thomas Esper, in Bangkok, Thailand, on the sidelines of the 6th ASEAN Defense Ministers Meeting. Both ministers discussed future cooperation between the two countries, especially under the Indo – Pacific Concept.
On Saturday (11/16), Chinese vice premier Liu He, US’ trade representative Robert Lighthizer and treasury secretary Steven Mnuchin had “constructive talks” on trade in a high-level phone call. The two sides discussed each other’ core issues for the first phase of an initial trade agreement, and agreed to maintain close communication.
While, President Donald Trump, said US’ farmers will receive another major round of “cash,” compliments of China Tariffs, saying the smaller farms and farmers will be get big beneficiaries. In the meantime, he said China is starting to buy American products and Japan deal has been closed.
From domestic, Lippo Group Director Adrian Suherman denied rumors that his company would split with OVO. As the founder of the digital money, he affirmed that the group committed to support the business joint with other investors such as Singapore’ Grab.
Last week, Indonesian Rupiah strengthened 0.08 percent to 14,077 versus US Dollar and the Jakarta Composite Index (JCI) closed up 0.48 percent to 6,128.34 compared to prior day. Today some analysts predict the local foreign exchange and the stock index will continue to strengthen.
A number of analysts hope that BI will slice its benchmark rate again to help the domestic economy and boost the investment. But, they rated, even if the results were not in line with market expectations, the effect would not be too significant and only affect the banking sector shares.
For today, the observes predicted the Rupiah will move in the range 14,030 – 14, 115 against the Greenback and the JCI between 6,024 – 6.202, compared to last weekend. To anticipate the BI’ moves, they advised investors to devise a short-term strategy especially on banking, coal stocks, consumer and telecommunications sectors.
The stocks to be watch for today are PT Bank Central Asia Tbk (IDX: BBCA), PT Bank Mandiri Tbk (IDX: BMRI), and PT Bank Rakyat Indonesia Tbk (IDX: BBRI), PT Adhi Karya Tbk (IDX: ADHI), PT Ciputra Development Tbk (IDX: CTRA), PT Vale Indonesia Tbk (IDX: INCO), and PT Telkom Indonesia TBk (IDX: TLKM).
May you have a profitable week!
Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia