JAKARTA (TheInsiderStories) — Good morning! This week the market movements will colored by several major issues in global and domestic. On Jan. 22, United States (US) Presiden Donald Trump and China’s Vice President Wang Qishang is scheduled to meet in the sidelines of World Economic Forum in Davos, Swiss.
Furthermore, China’s Vice Prime Minister Liu He will also meet US Finance Minister Steven Munchin and Trade Representatives Robert Lighthizer, in Washington. But the schedule is still unclear.
Previously, the discussion on the trade dispute outcome in Beijing is quite satisfying. From the three-day talks, Chinese Trade Ministry Spokesperson Gao Feng stated that both countries have met mutual understanding as the resolution basis. He added, structural issues such as technology transfer and intellectual rights protection have been solved.
Speaking in the Economic Club of Washington forum, Jerome Powell, the Federal Reserve (Fed) Governor said that the central bank will be more cautious in implementing monetary policy. By low and maintained inflation, The Fed will be more patient and monitoring thoroughly about 2019’s condition.
US and China trade peace made investors found confidence in entering risky instruments like the stocks market in Asian developing countries. If the economic-superpowers trade tension is really going to end, global economic growth slowdown can be minimized.
From abroad, United States will publish its trade balance and retail sales data. Meanwhile, China will announce December’s Gross Domestic Product (GDP) which is certainly will impact the market move this week.
Amid 2019’s optimism, Indonesia’s Financial Services Authority (FSA) mentioned that there are still downside risks in the country. So it established some strategies in mitigating the risks.
Commissioners Chairperson of FSA, Wimboh Santoso explained, the authority will enlarge medium-term and long-term alternative fundings to strategic sectors. It will also give incentives for prospective listed-companies through debt-based or sharia-based shares issuance.
Moreover, Santoso mentioned, Financial Services Authority will encourage financial services institutions to increase funding for priority sectors such as export, import substitution, tourism, and housing. Thus, it will expand financial access for micro small medium enterprises and communities in remote areas that have not been reached by formal financial institutions.
Digitalization of product and financial services will also be encouraged, said Santoso. As he is expected that there will be more technology usage in financial business process.
Ahead of this week, Indonesia will release foreign debt statistic, export import development, and banking survey report. Then, Bank of Indonesia will announce the 7-Day Reverse Repurchase (7-DRR ) rate. Others, Japan to announce inflation and United Kingdom’ vote on Brexit deal.
Due to investors high appetite to emerging countries amid the Fed incoming policy and US-China trade peace progress, Rupiah was seen gaining power. During last week, Rupiah strengthened by around 2 percent to 14, 076 versus the greenback.
The Jakarta Composite Index surged by 1.39 percent in a week. On the last day of trade, closed at 6,361.45 and hit record in the last 10 months. Infrastructure sector has the highest gain by 4.09 percent. From the beginning of 2019, there are Rp4.03 trillion (US$277.93 million) foreign inflow to Indonesian stocks market.
US Dollar depreciation supported investors confidence to enter Asian market. Federal Reserve minutes of meeting data showed less aggressive act. With no reference rate hike in short period of time, investment in Dollar currency is considered unattractive.
May you have a profitable week!
Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia