Global Market Highlight
DJIA rose by +0.17% on Friday (10/08) followed by various movements of S&P 500 (+0.06%) and Nasdaq (-0.87%). The rise was supported by a good news from the data release, in which the US Department of Labor reported the unemployment rate in July fell sharply to 10.2% from 11.1% previously. In addition, over the past month, the US absorbed workers outside the agricultural sector, known as non-farm payrolls, totaling 1.763 million people, more than the forecast of 1.53 million. Not only that, the average hourly wages also increased 0.2% in July after declining for 2 consecutive months. The rising wages is likely to increase consumer spending or household spending, which is the backbone of the US economy and contributes about 70% to US GDP. Furthermore, US President signed four executive orders, one of which contains direct assistance to the unemployed of USD400 per week. This is done in order to move the US economy, so that the US economic revival will be gradual. Moreover, the market will look forward to several data releases today, such as: 1) US Consumer Inflation Expectations; 2) China Inflation Rate; 3) China PPI.
Domestic Updates
The position of Indonesia’s foreign exchange reserves at the end of July 2020 amounted to USD135.1 billion, an increase compared to the end of June 2020 at USD131.7 billion. This increase is influenced by the issuance of global bonds and the withdrawal of government loans. This new level is equivalent to financing 9.0 months of imports or 8.6 months of imports and government external debt. Meanwhile, the international adequacy standard is only 3 months of imports. Bank Indonesia considers the foreign exchange reserves to be able to support external resilience and maintain financial stability.
Company News
IHSG Updates
JCI slipped by -0.66% to 5,143.89 on Friday (10/08) followed by net foreign sell reaching IDR1.33 trillion. The market dropped despite the increase on foreign exchange reserves. The movement is in-line with the weakening on regional Asia indices. Meanwhile, the cumulative total of Covid-19 case reached 125,396 in Indonesia. In the Southeast Asia region, Indonesia is in second place after the Philippines with a total of 129,913 cases. It is feared that the increase in cases in the country tends to increase to around 2,000 cases per day and the restrictions will be tightened. Cases in DKI Jakarta also tend to keep setting records so that the DKI Jakarta provincial government has decided to extend the transitional PSBB period until August 13. Moreover, the Rupiah exchange rate was weakening at IDR14,625. We estimate JCI will move in the range of 5,080-5,187 while waiting for the release of current account data as of 2Q20. Today's recommendation: BMRI, TOWR, ACES, ANTM.
Corporate Action
IPO: SGER
Cash dividend date: CTRA, TPMA
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