Foreign Sale Out, Big Bank Shares Ambles

Jakarta, CNBC Indonesia – Shares of major banks fell into the red zone, amid the Jakarta Composite Index (JCI) also corrected at the close of trading on Thursday (18/11/2021). The weakening of jumbo bank shares occurred in line with the net sell by foreign investors.

According to data from the Indonesia Stock Exchange (IDX), the JCI fell 0.59% to 6,636.47, with a transaction value of Rp 11.99 trillion and trading volume of 27.04 billion shares today.

A total of 237 stocks rose, 265 stocks fell, and the remaining 160 were flat.

In the midst of the JCI weakening, foreign investors made a net sale of Rp 446.75 billion in the regular market, but booked a net purchase of Rp 27.34 billion in the negotiating market and cash market.

The following is the weakening of big-name bank shares today (18/11).

1. Bank Central Asia (BBCA), shares -2.31%, to Rp 7,400/share, net sell Rp 251.15 M

2. Bank Danamon Indonesia (BDMN), -2.00%, to Rp 2,450/share, net sell Rp 4.81 M

3. Bank Negara Indonesia (BBNI), -1.07%, to Rp 6,925/share, net sell Rp 21.30 M

4. Bank Mandiri (BMRI), -0.69%, to Rp 7,175/share, net sell Rp 2.22 M

5. Bank CIMB Niaga (BNGA), -0.48%, to Rp 1,030/share, net sell Rp 2.64 M

6. Bank Rakyat Indonesia (BBRI), -0.48%, to Rp 4,180/share, net sell Rp 26.96 M

Bank shares belonging to the BBCA Djarum Group fell the most, amounting to 2.31%. The decline in BBCA shares occurred as foreigners flocked to sell these shares with a net selling value of Rp 251.15 billion, the highest in the current stock exchange.

With this, the stock with the largest market capitalization on the bourse has fallen 3.8% in a week, while BBCA’s stock has been stagnant for a month.

Latest, BBCA will distribute an interim cash dividend of Rp 25 per share for the 2021 financial year. The calculation for the financial year is from January 1, 2021 to September 30, 2021.

The decision to distribute the interim dividend is in line with the decision of the company’s Annual General Meeting of Shareholders (AGM) on March 29, 2021 and the decision of the directors and commissioners on November 4, 2021.

As for the final schedule of the trading period for shares with dividend rights (cum dividend) in the cash market and the recording date for the list of shareholders entitled to dividends (record date) falls today, Thursday (18/11).

Meanwhile, the cash interim dividend payment will be carried out on December 7, 2021.

In addition to BBCA’s shares, BDMN’s shares also fell 2.00%, amid foreign net sells reaching Rp 4.81%.

Then, the trio of shares of state-owned banks, BBNI, BMRI, and BBRI also fell due to the foreign sell-off today, with a decline of 1.07%, 0.69% and 0.48%, respectively.

The three stocks are also among the stocks most sold by foreigners. Foreigners issued BBNI shares with a net selling value of Rp 21.3 billion. For three dollars, foreigners also recorded a net selling value of BMRI and BBNI shares of Rp 2.2 billion and Rp 27.0 billion, respectively.

Regarding sentiment for today’s market, the weakening Wall Street certainly gave negative sentiment to Asian stock markets in today’s trading, including the JCI. Moreover, the increase in inflation was also highlighted by the Minister of Finance Sri Mulyani Indrawati as one of the threats facing Indonesia.

Several countries, such as the United States, China, Europe, Mexico and South Korea experienced price increases at the producer level, causing high inflation. Indonesia also experienced an increase, although not significantly.

In addition, high inflation will trigger an increase in interest rates, one of which is the US central bank (The Fed), which will certainly have a significant impact on global financial markets, including Indonesia. Currently, market participants see the opportunity for an aggressive increase in the next year.

Domestically, Bank Indonesia decided to keep the BI 7-day reverse repo rate at 3.5% in line with consensus estimates.

The BI 7 Day Reverse Repo Rate has not changed since March 2021. This means that the benchmark interest rate has been on hold for nine consecutive months. The benchmark interest rate at 3.5% is the lowest in the history of independent Indonesia.

With low inflation and the exchange rate of the rupiah which tends to be stable despite the tapering of the Fed, the pressure for BI to raise interest rates can be said to be nil.

However, low interest rates are still needed to help the Indonesian economy bounce back after slowing down in the third quarter of 2021.

James Sweeney, chief economist at Credit Suisse, said BI will raise interest rates next year to prevent capital outflows and maintain rupiah stability.

CNBC INDONESIA RESEARCH TEAM

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