Next Week Want to Cuan Play Stocks? Attention This Thing!

Jakarta, CNBC Indonesia – This week, the Composite Stock Price Index (JCI) managed to return to the level of 7,000, after a free fall after the Eid holiday. Even though it was only closed for two days in the green zone, in a week the JCI was able to gain 1.56%. point-to-point and closed at 7,026.256 on the last trading day (27/5).

For next week, investors need to pay attention to several things that might move the market.

First from within the country, detailed rules regarding the implementation of local sales policies or Domestic Market Obligation (DMO in Indonesia) will be released next week. This regulation directly has implications for world CPO price movements and can also be a sentiment on the performance of palm oil and CPO issuers that are listed on the stock exchange.

Next week, the authorities will also release inflation data for May 2022 which is expected to rise on an annual basis (year-over-year) and monthly (month-to-month). Last month, Indonesia’s inflation was at 3.47%, while for this month Trading Economics estimates inflation at 3.6%.

This figure is still within the range of the inflation target set by Bank Indonesia at level 3.±1% or 2-4%. However, in a press conference after the May 2022 edition of the Board of Governors Meeting which was held last week, BI Governor Perry Warjiyo revealed that domestic inflation this year will be above the target range. This means that inflation will break above 4%.

Next week, Indonesia will also release manufacturing conditions in the form of a PMI report. This month, manufacturing is predicted to continue to expand, although the figure slowed from the previous month.

Another domestic sentiment that deserves attention is the various corporate actions during dividend season in the capital market. A number of companies will still hold the Annual General Meeting of Shareholders (AGM) to approve the use of net profit from last year’s operations.

Furthermore, various sentiments from abroad may also guide the JCI movement next week. The first is Wall Street’s fantastic performance last week, where the S&P 500 index had its best weekly performance of the year and is slipping away bear market. Last week, Wall Street’s three main indexes rose significantly and were able to stop the decline that occurred in several weeks in a row.

Worries about the worst-case scenario of inflation and high interest rates seemed to subside from last week. Wall Street instead rose after minutes of the Fed’s latest meeting showed that central bank officials think they need to raise interest rates by half a percentage point (50 bps) each at their next two meetings.

Other important news from Uncle Sam’s country includes the employment report as a proxy for economic conditions with the unemployment rate predicted to remain at its lowest level since February 2020. Furthermore, a number of Fed officials are also scheduled to speak regarding the increasingly monetary condition. hawkish.

From continental Asia, this week will be filled with manufacturing PMI releases, with China in the main spotlight, with goods manufacturers expected to report another contraction due to the ongoing tight lockdown in Shanghai and tight restrictions in other cities. The main PMI readings will come from South Korea and India. South Korea next week will also publish inflation data for May which is likely to reflect rising global inflationary pressures.

In the UK, the final forecast for PMI figures is likely to confirm a sharp slowdown in business activity growth during May amid rising inflationary pressures and growing geopolitical uncertainty.

Next from the euro area, the inflation report will be released next weekincluding for Germany, France, Italy and Spain. The annual inflation rate in the Euro Area is expected to spike again in May, hitting a new all-time high of 7.7% compared to 7.4% in April.

Finally, investors also need to monitor the development of the conflict in Eastern Europe between Ukraine and Russia which has major implications for the prices of various commodities including energy, crude oil and coal, to the prices of food commodities such as wheat and vegetable oil, including CPO.

CNBC INDONESIA RESEARCH TEAM

[Gambas:Video CNBC]