Jakarta, CNBC Indonesia – The election of Joe Biden as the 46th president of the United States is projected to have a positive impact on the stock market, especially stocks in sectors such as commodities, textiles and banking.
PT Phillip Sekuritas’ equity analyst, Anugerah Zamzami Nasr, assessed that the election of Biden will have an impact on foreign capital flows to emerging market countries. “This is also supported by the expectation of a corporate tax hike which could depress issuers’ profits on Wall Street,” said Zamzami when contacted. CNBC Indonesia, Sunday (8/11/2020).
In addition, Zamzami said, there are expectations of economic improvement, which have so far contracted due to the Covid-19 pandemic, which are expected to recover soon.
“Expectations of economic improvement and improvement business cycle in countries emerging making foreigners look for a market that is still lagging and is expected to start growing or improving its economic potential, “he said.
What stocks will have a positive impact on the market?
Director of PT Anugerah Mega Investama, Hans Kwee, noted that a large US fiscal stimulus, which is worth US $ 2.2 trillion, will be a positive sentiment even though Biden will face challenges in the Senate whose majority is still controlled by the Republican Party.
This has the potential to make it difficult for Biden and Democrats to pass a large fiscal stimulus policy.
“The delay in fiscal policy is very likely to encourage the Federal Reserve to issue a more accommodative monetary policy,” said Hans Kwee, Sunday (8/11/2020).
However, CNBC Indonesia’s Research noted, if this stimulus is agreed upon, it will have a positive impact on gold issuers, because the bigger the stimulus means the more US dollars circulating in the economy, so in theory the greenback will weaken. With the weakening of the dollar, one of the commodities that will benefit, of course, is gold because the price of gold is calculated using the US dollar as a reference.
Precious metal issuers such as PT Aneka Tambang Tbk (ANTM), PT Merdeka Copper Gold Tbk (MDKA) will benefit.
Furthermore, the second sector that benefited again came from the commodity sector, namely coal and palm oil. Positive sentiment arises for this sector, because if Biden is elected, of course, with Biden’s attitude that tends to be more lenient towards China and other countries, of course there is an opportunity for the trade war to subside, of course this is a positive thing for this commodity.
Shares in this sector will benefit, such as PT Astra Agro Lestari Tbk (AALI), PT Adaro Energy Tbk (ADRO), PT Bukit Asam Tbk (PTBA).
Apart from the onset of the rapid flow of foreign capital into Indonesia, one of the sectors that market players will also be interested in is stocks in the banking sector.
This is due to the composition of the financial sector which dominates the JCI market capitalization so that it is more attractive to place funds by foreigners and of course the potential of the financial sector to manage incoming funds.
Stocks such as PT Bank Central Asia Tbk (BBCA), PT Bank Mandiri Tbk (BMRI), PT Bank Rakyat Indonesia Tbk (BBRI), and PT Bank Negara Indonesia Tbk (BBNI) will potentially benefit.
In the latest development, there is positive news that Indonesia’s exports to the US have the potential to increase after the confirmation regarding the extension of the Generalized System of Preferences (GSP) tariff preference facility to Indonesia by the United States Trade Representative (USTR).
Export-oriented textile issuers to the US market such as PT Pan Brothers Tbk (PBRX) and PT Sri Rejeki Isman Tbk (SRIL) will have the opportunity to have a positive impact.
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