The Indonesia Stock Exchange Gives a Valentine's Gift; a New Record
Rising Asian stock markets, particularly a strong Hang Seng (Hong Kong) that opened today after the Chinese new year celebrations, had a positive impact on the Indonesia Stock Exchange (IHSG). As had happened in previous years, the IHSG has the tendency to gain ahead of Valentine's day. Today, market participants received their special Valentine's gift: a new record-high IHSG level of 4601.95, although in the end it had to close a bit lower.
Both foreign and domestic companies published good corporate results for the year 2012. This made market participants enthusiastic to trade and resulted in a green wave across Asia. During today's trading day, the IHSG reached its highest level (4601.95) at the start of session two and its lowest level (4575.84) at the start of session one. At the end of the trading day, it stood at 4588.67. Trading volume and total value of transactions increased, with foreign investors mostly buying Indonesian assets while domestic investors mostly sold their stocks.
Movement of the IDR rupiah was still negative after it was reported that Indonesia's liquid balance in Q4 2012 widened from minus US $5,34 billion to minus US $7.76 billion. This triggered concerns that Indonesia would not be able to finance its need for US dollars. Apart from that, Japan's decreased Gross Domestic Product (GDP) reminded us that we are currently still dealing with a recession, and this limits the strength of Asian currencies, including the rupiah. Similarly, declining GDP data of Germany and France indicate that the economy of the Euro zone is still problematic. The US dollar, on the other hand, gained after Jack Lew (candidate for the position of America's Finance minister) said to support a strong US dollar.
Asian stock markets' gain was also due to the commitment of the Bank of Japan (BOJ) to continue its asset purchase program. Moreover, given the contraction of Japan's GDP growth, it is speculated that this program is going to be sped up. Currently, 308 companies listed in the MSCI Asia Pacific have already reported corporate results of 2012, and 53 percent of these companies reported higher than expected profit.
For Friday's trading day, it is expected that profit taking will colour the IHSG movement red, but hopefully the decline will be limited if positive market data are published.
When writing this column, European stock markets tend to weaken due to contracted GDP data of Japan, Germany and France, despite positive corporate reports. Apparently, market participants choose to exit the market. The American stock markets might follow the current European trend. Moreover, American stock indices have gained recently and this provides opportunity for profit taking. Perhaps the publication of the Initial Jobless Claims and Consumer Confidence can limit the (possible) decline.
Top Movers – Thursday 14 February 2013
| Company | Change |
| • Bumi Resources |
26.39% |
| • Eratex Djaja | 17.39% |
| • Saham Seri B Hanson Internation | 13.79% |
| • Fortune Indonesia | 12.90% |
| Company | Change |
| • Lamicitra Nusantara |
11.54% |
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