Jakarta, CNBC Indonesia – Over the past week the stock market and money market have strengthened, while yields (yield) Bonds were depressed, indicating that market participants are increasingly optimistic about the future economic outlook. Today, the market focus returns to the country.
The Composite Stock Price Index (JCI) recorded a 1.42% jump last week with corrections only on Wednesday (1/9/2021) and Thursday (2/9/2021) trading. On Friday’s trading (3/9/2021), the JCI closed up 0.8% to 6,126.92.
The JCI correction on Wednesday last week was the largest, almost 1%, after the release of manufacturing activity data. Indonesia’s manufacturing activity in August 2021 tends to improve compared to the previous month, but not enough to bring it into the expansion zone.
IHS Markit reported that Indonesia’s manufacturing activity as measured by the Purchasing Managers’ Index (PMI) as of August 2021 was recorded at 43.7, up from 40.1 the previous month.
The PMI uses the number 50 as the limit. If it is still below 50, then the business world is still in contraction mode. This means that the national industrial sector has not yet expanded and is under pressure due to the effects of the pandemic.
During the past week, the JCI transaction value reached Rp 55.4 trillion and investors made a net purchase (net buy) in the regular market amounting to Rp 1.6 trillion this week. This large buying action indicates that in the short term there will be no policy effect tapering (reduction in purchases of US/US central bank bonds in the market) against Indonesia.
Not surprisingly, the rupiah rose 1.08% point-to-point to Rp. 14,260/US$. On Friday (3/9/2021) trading yesterday, Garuda currency closed slightly higher by 0.07% against the US dollar.
The rupiah rally occurred amid the pressure that hit Greenback. The US dollar index fell for the fifth straight trading day. Even if you look further back, in 10 trading days, the index of the US dollar exchange rate against its six main trading partners fell 9 times.
Meanwhile, in the bond market there was a buying action that eroded yields (yield) state securities (SBN). During the week, the yield on 10-year SBN, which is the market reference, weakened 3.4 basis points (bp) to 6.132%.
This happened in the midst of well-maintained domestic inflation and weakening yield US government bonds (US Treasury). Sloping inflation makes bond yields more attractive, triggering buying action that pushes up prices (and depresses) yield).
The Central Statistics Agency (BPS) announced Indonesia’s inflation rate data for the period August 2021. The results are not far from expectations, the inflation rate is still slow which indicates there is no pull from the demand side.
The Deputy for Distribution Statistics and Services at BPS Setianto reported that inflation in August 2021 was 0.03% on a monthly basis, with an annual inflation rate of 1.59%. This achievement is not much different from the projections of analysts and economists summarized in the poll CNBC Indonesia.
– .
