It seems that the Indonesia Stock Exchange (IHSG) was blessed by the Chinese new year celebrations as it closed higher on Monday than on the previous trading day. This is a better performance than usual on the days around the new year. If we take a look at the period 2008-2012, the IHSG declined three times on the day before new year, and twice on the day after. This year, the IHSG declined on the day before by -0.26% and increased by 0.27 on the day after.
During Monday's trading day, the IHSG reached its highest level (4515.12) at the start of session one, and its lowest level (4496.02) just before pre-closing. In the end it reached 4503.25, a 0.27 percent increase. Trade volume and total value of transactions declined. Foreign investors mostly bought Indonesian stocks, while domestic investors mostly sold their Indonesian assets.
The Indonesian rupiah (IDR) strengthened - as usual - ahead of tomorrow's announcement by the Board of Governors of Indonesia's Central Bank concerning its benchmark interest rate (BI rate); whether to change or continue its current level of 5.75 percent. Although the BI rate is estimated to stay on the same level, market participants are hoping that the interest rate of the central bank’s deposit facility (Fasbi) will increase by 25 basis points from the current 3.75 percent. Investors are also awaiting the Central Bank's steps concerning the creation of an onshore reference rate to settle rupiah forward transactions domestically. Appreciation of the rupiah was also supported by a strengthening Euro after industrial production data of France was above expectations.
Most Asian stock indices were closed due to the Chinese new year festivities (these include the stock markets of China, Hong Kong, South Korea, Taiwan, Vietnam and Malaysia). Those that were open, such as Dubai and Russia, recorded a rise. Nonetheless, market participants are still observing international sentiments, in particular related to the European Union meeting between Europe's finance ministers this week.
When writing this column, the European market indices were mixed due to a wait & see stance towards results of the meeting between the finance ministers of the European Union. Perhaps they will discuss the global monetary system, the chance of a currency war, and support for Cyprus and Greece. They also might discuss the effects on the Euro zone debt resolution of political trouble in Italy and Spain. American stock indices will most likely be mixed as well, in anticipation of the European Union meeting and corporate reports concerning the performance of companies in 2012.
Top Movers – Monday 11 February 2013
|• Prima Alloy Steel Universal
|• Titan Kimia Nusantara||21.85%|
|• ATPK Resources||19.88%|
|• Centrin Online||15.00%|
|• Sunson Textile Manufacture
|• Steady Safe
|• Multi Prima Sejahtera||8.47%|