Jakarta, CNBC Indonesia – When the Composite Stock Price Index (JCI) fell almost 3% in the first trading session on Tuesday (10/5/2022), several issuers in the consumer sector actually strengthened.
CNBC Indonesia noted that there were 6 stocks from the consumer sector with a market capitalization value of above Rp. 30 trillion which rose until today’s afternoon break.
In the first position, PT Unilever Indonesia Tbk (UNVR) shares rose almost 9%. Then in second position was PT Kalbe Farma Tbk (KLBF) shares which rose 5.23%.
Furthermore, in the third position, there are shares of issuers belonging to the Salim group, namely PT Indofood CBP Sukses Makmur Tbk (ICBP), which appreciated 4.73%.
Saham Change
- UNVR 8.98%
- KLBF 5.23%
- ICBP 4.73%
- HMSP 3.24%
- INDF 2.86%
- MYOR 0.91%
The stock movement in today’s trading is indeed quite interesting to observe. Big bank stocks fell more than 1% and commodity-linked stocks also fell more than 1%.
These two stocks are the pillars of the JCI throughout this year, thus making the JCI give a return of up to 9.8% before the Eid holiday and become the best reference stock index in the Asia Pacific region.
Different from before, now it’s the turn of the consumer sector to show off. There are several things that can be learned from this phenomenon.
The first is the sector rotation. There is a possibility that the banking sector and commodity stock prices are overbought so now is the right time to take profit.
On the other hand, investors are also turning to consumer sector stocks which are more defensive and still attractive in terms of valuation because so far their performance has tended to be lagging.
This sectoral rotation can also be explained from two sides, namely improving performance and momentum. Please note, yesterday BPS just released economic growth figures for the first quarter of 2022.
Indonesia’s economy is reported to have grown 5.01% in the first quarter of 2022. The main support for this economic growth was household consumption which grew 4.34% in the same period.
As the fourth most populous country in the world, domestic consumption is the backbone of the economy. The revival of domestic consumption is one of the right moments to invest in the consumer sector.
In terms of momentum, you could actually say there is a lag phase. But keep in mind that the Indonesian people have just passed the once-a-year moment, namely fasting Ramadan and Eid al-Fitr.
During fasting and Eid al-Fitr, domestic consumption tends to increase due to additional income factors in the form of Hari Raya Allowances (THR).
This THR is spent on various needs, such as food and beverages to accessories and clothes, and gadgets.
However, this rotation to the consumer sector could be short-lived and is a tactical step considering that the consumer sector is also overshadowed by the risk of rising inflation until the VAT increases to 11% and cigarette excise taxes which result in the selling price of this one processed tobacco product.
CNBC INDONESIA RESEARCH TEAM
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