26 January 2022 (closed)
Jakarta Composite Index (6,600.82) +32.65 +0.50%
USD/IDR (14,146) -6.00 -0.04%
EUR/IDR (17,335) +57.05 +0.33%
Most stocks in the Southeast Asian region were in green territory on Monday (20/08). So was Indonesia's benchmark Jakarta Composite Index. The index rose a whopping 1.87 percent to close at 5,892.19 points at the first trading day of the new week, pairing some of the losses it has suffered in recent weeks.
The impressive rebound of Indonesian stocks on Monday (20/08) is attributed to four matters:
(1) improving risk appetite ahead of China-US trade talks (due later this week),
(2) many Indonesian blue chip stocks are currently available at attractive prices after having suffered heavy losses in recent weeks,
(3) the stable rupiah exchange rate after Bank Indonesia raised its benchmark interest rate by 25 basis points to 5.50 percent last week, and
(4) easing concerns related to the Turkish lira.
Simmering global trade tensions have been causing uncertainties in global financial markets for the past couple of months. However, the USA and China will resume trade talks on Wednesday (20/08). Although earlier talks between both nations have not been fruitful, market participants are seemingly optimistic that a ceasefire can be agreed upon.
Several Indonesian blue chips experienced good gains on Monday (20/08) amid attractive valuations, thus pushing the benchmark index higher. These blue chips include United Tractors (+4.72 percent), Astra International (+4.23 percent), Bank Negara Indonesia (+2.83 percent), HM Sampoerna (+2.82 percent), Gudang Garam (+2.34 percent), and Bank Central Asia (+2.25 percent).
Meanwhile, the Indonesian rupiah appreciated 0.03 percent to IDR 14,588 per US dollar (according to the Bloomberg Dollar Index). Since Bank Indonesia's latest interest rate hike (on 15 August 2018), the rupiah has been stable against the US dollar.
Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.28 percent to IDR 14,578 per US dollar on Monday (20/08).
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia
And although the lira continued to depreciate against the US dollar on Monday morning (20/08), the recent downgrade of Turkey by Standard & Poor's (S&P) and Moody's Investors Service (into further junk territory) has seemingly been priced in by markets.