Market Update: Declines in Indonesian Market Ease, BI Maintain Interest Rates

Market Update: Declines in Indonesian Market Ease BI Maintain Interest Rates

• Indonesian stocks end slightly lower while rupiah remained above Rp15,000 per U.S. dollar after Bank Indonesia held interest rates unchanged.
• Palm oil shipments from Indonesia, the world’s biggest supplier, may surge more than 60% in second half of the year from the first six months as the government ramps up exports to reduce bloated inventories.
• Indonesia’s central bank kept its benchmark rate unchanged at a record low 3.5% to foster economic growth, as it sits out the global shift toward fighting inflation with tighter monetary policies. The deposit and lending facility rate remained at 2.75% and 4.25% as well. The central bank sees the economy expanding more toward the lower end of a 4.5%-5.3% outlook range.
• The Bank of Japan stuck to its ultra-easy monetary policy as expected, while lowering its growth forecast for 2022 and raising its inflation predictions.
• Japan also reported trade balance shifted to a deficit of ¥1,383.8 billion in June 2022 from a surplus of ¥369.4 billion in the same month a year earlier.

Indonesian stocks end slightly lower while rupiah remained above Rp15,000 per U.S. dollar after Bank Indonesia held interest rates unchanged.

Jakarta composite down 10.612 points (-0.154%) to 6,864.131 while LQ45 declined 0.246% to 971.554. There were 16.849 billion shares traded worth of Rp10.583 trillion, including transaction of Rp1.269 trillion in negotiation market. 264 shares rose while 224 declined and 193 unchanged.

According to JISDOR Thursday afternoon, rupiah fell 33 points (-0.22%) to 15,017 while spot rate weakened 45 points (-0.30%) to 15,030.

Indonesia’s central bank kept its benchmark rate unchanged at a record low 3.5% to foster economic growth, as it sits out the global shift toward fighting inflation with tighter monetary policies. The deposit and lending facility rate remained at 2.75% and 4.25% as well. The central bank sees the economy expanding more toward the lower end of a 4.5%-5.3% outlook range.

Palm oil shipments from Indonesia, the world’s biggest supplier, may surge more than 60% in second half of the year from the first six months as the government ramps up exports to reduce bloated inventories.

NIKL nearly doubled its net profit in the first half of 2022 to $5.72 million, shot up almost 127% from $2.52 million in the same period last year.

Global markets

• Asia Pacific stocks were mixed on Thursday while Japanese shares were modestly higher after its central bank kept rates on hold
• The Bank of Japan stuck to its ultra-easy monetary policy as expected, while lowering its growth forecast for 2022 and raising its inflation predictions.
• Japan also reported trade balance shifted to a deficit of ¥1,383.8 billion in June 2022 from a surplus of ¥369.4 billion in the same month a year earlier. Exports rose by 19.4% yoy to ¥7,223.8 billion in June 2022, the most since November 2021, after a 15.8% increase in May. Imports expanded 46.1% yoy to ¥6,854.4 billion in June 2022, above market estimates of 45.7% rise and after a 48.9% jump in May.
• In Europe, stocks declined with investors await the European Central Bank meeting later in the session, which is widely expected to result in the central bank’s first interest-rate hike since 2011 later this week.
• On Wednesday, data out of the U.K. showed inflation hit yet another new 40-year high in June as food and energy prices continued to soar, escalating the country’s historic cost-of-living crisis.

Commodities

• Oil prices fell on Thursday for a second straight session, as demand concerns outweighed tight global supply after U.S. government data showed tepid gasoline demand during the peak summer driving season.
• European natural gas futures fell to their lowest in three weeks as Russia resumed shipments to Germany, allaying fears of a permanent cut-off due to the war in Ukraine.
• Gold was also down to the lowest in nearly a year as investors expect interest rate hikes by major central banks to curb soaring inflation.

Major index and commodities this afternoon:

STOXX 50.. 3,559.37 (-0.72%)
CAC 40.. 6,149.39 (-0.57%)
DAX.. 13,148.46 (-1.01%)
FTSE.. 7,231.95 (-0.45%)

NIKKEI.. 27,803.00 (+0.44%)
HSI.. 20,574.63 (-1.51%)
SHCOMP.. 3,272.00 (-0.99%)
TAIEX.. 14,937.70 (+1.39%)
KOSPI.. 2,409.16 (+0.93%)
S&P/ASX 200.. 6,794.30 (+0.52%)
SENSEX.. 55,520.73 (+0.22%)
STI.. 3,156.83 (-0.42%)

DOW FUT.. 31,735.00 (-0.37%)
S&P FUT.. 3,948.25 (-0.36%)
NASDAQ FUT.. 12,407.75 (-0.46%)

Crude Oil WTI.. -3.15 (-3.15%)
Brent Oil.. -2.95 (-2.76%)
Natural Gas.. -0.30 (-3.77%)
Gold.. -16.20 (-0.95%)
Silver.. -0.40 (-2.13%)
Copper.. -0.06 (-1.82%)