Russo-Ukrainian War Predicted to Make Indonesia Profit, Coal to Nickel Prices Will Soar All

JAKARTAKOMPAS.com – Indonesia as a commodity-rich country is considered to have a strategic position in the geopolitical conflict between Russia and Ukraine.

A number of capital market observers project that this will encourage optimism in commodity prices, capital markets and the Indonesian economy.

Also read: 10 Most Cuan Stocks a Week, There are Mining and Energy Issuers

Nickel

Founder of Forum Saham, Tape Trader8 & Beta Trader Yuzha Sha explained, the backbone of exports from Russia is commodities. Starting from oil, gas, coal, to mineral goods processed by mining such as copper, diamonds and gold.

The Russia-Ukraine geopolitical conflict has prompted concerns about the depletion of the world’s nickel supply.

He said that in 2021 Russia’s nickel exports decreased 66.5 percent to 45,400 tons from 135,000 tons in the previous year. Meanwhile, Indonesia is one of the largest nickel producing countries in the world.

Also read: After the ban on exports of nickel and bauxite, tin and copper will follow in 2023

According to data from the United States Geological Survey (US Geological Survey), Indonesia’s nickel production will reach 1 million metric tons in 2021 or account for 37.04 percent of the world’s nickel.

“This will be one of the potentials to make Indonesia’s economy great again. For example for nickel there are only a few country which has millions of tons in it. Nothing can replace cheap energy coal. So this is interesting, especially for commodities, whether it’s nickel, coal, copper, aluminum and others,” said Yuzha in the Investment Talk event themed Great Indonesia Economy, which was held online by D’ORIGIN Financial & Business Advisory and IGICO Advisory, Sunday (27/2/2022).

Also read: The Impact of the Russo-Ukrainian Conflict in Indonesia, Fuel Prices Can Rise, Also Elpiji and Electricity

Coal

On the other hand, due to the conflict with Ukraine, Russia is currently facing economic boycott sanctions from the international community which of course disrupt the exports of the Red Bear country.

So that the supply of commodities from Russia to the world needs to be replaced by competing countries. One of them for coal is Indonesia.

According to him, global economic conditions will be better if the conflict (Russia’s invasion of Ukraine) ends soon. Because it can maintain the momentum of global economic growth after being hit by the pandemic.

Also read: Indonesia will eliminate all coal-fired power plants by 2056

Yuzha said that in the future investors must also pay attention to other factors, namely by 2025 the European Union will set a zero-carbon policy. As is known, coal has always been controversial when it comes to emissions.

“My analysis is that commodities will indeed prosper but there will be potential sunsets for commodities, especially for fuel. Meanwhile nickel, as commodity alternatives that have become part of our lives in use cell phone, smart card and others have the potential to boost production and automatically encourage commodity super-cycles to occur,” he explained.

Also read: Economy recovers, Indonesia will return to being an upper-middle-income country in 2022

Gold price and crude palm price

With this growth, it will encourage inflation because people are more consumptive, so they need a lot of money in circulation. With the high demand for state gold reserves, it will certainly control the price of precious metals.

Meanwhile, crude palm oil or CPO, will depend heavily on provisions from Europe and follow the price of crude oil.

Mendekati level Commodity Boom 2010-2011?

Senior Portfolio Manager of Samuel Asset Management, Agung Ramadoni, said that almost all commodity prices in the past year increased quite sharply, approaching the level of commodity boom in 2010-2011. However, this needs to be examined more deeply whether it will be sustainable or not.

He judged that it depended on oil capital expenditure (capex) of the majority of the world’s oil companies. Therefore, to make it smooth, the majority of the world’s oil companies issue capex progressively, global political conditions must be more stable with the cessation of conflict in Europe.

Also read: Did Indonesia Benefit from the Russo-Ukrainian War? This is the explanation

“So far capex compared to 2011 or 2014 they are still far away. in terms of inventory still very low. good from copper, nickel, aluminum, and tin are still relatively low. Still in early stage bagi commodity price At the moment. So we are waiting,” he said.

However, Agung views the domestic economy with optimism. For example, in the retail sector, which began to make improvements since 2020, which fell due to the pandemic. From the banking sector, liquidity is abundant with the level of non-performing loans under control.

It also encourages the economy to recover better. This can be seen from the increasing sales of automotive and property products.

Investors are asked to be careful and not to panic on news about war

On the same occasion, Founder of GaleriSaham.com Rio Rizaldi appealed to be more careful in investing.

According to him, economic indicators must be seen to determine price action. Where supply and demand are very influential, including positive sentiment and pessimism.

Therefore, it is actually better if economic conditions grow in ideal conditions without any conflicts like what is happening on the Blue Continent.

“Investors should know the basic concept of price movement, not just look at impact Russia vs Ukraine war, but Indonesia’s economic projections, trade balance deficit, and others. For that, investors need to aware for sentiment market now and in the future but there is no need to be reactive to the news now, ”said Rio.

Rio stressed that domestic investors should not panic in the face of the sentiment of the Russian-Ukrainian conflict on the market, which then sells their shares. By always looking at the fundamental condition of the issuer’s business.

“As an investor, you must follow the business concept, which is to find a way to survive. They try to stay afloat even growing in any condition. Maybe trader can follow the businessman. So that we are better prepared for all circumstances and try to continue to grow,” added Rio.

Stock recommendations that are affected by positive issues

Founder of Syariah Saham Asep M. Saepul Islam or familiarly called Mang Amsi at the event recommended several stocks in the context of sentiment on Russia-Ukraine geopolitical issues.

He said investors could invest in shares of issuers that were positively affected by the issue, such as UNTR, AALI, INCO, BTPS, ITMG, to SIDO.

“This is because they have released their year-end report and their performance has significantly increased. For the full year 2021, the performance will be solid, even more so, supported by the increase in CPO, nickel and coal prices for ITMG, AALI, INCO and UNTR. The debt ratio is still below 1 (DER < 1)," said Saepul.

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