Although it was closed slightly lower yesterday, the JCI was still able to hold on to level 6,000. Potential profit taking as well as plans to tighten activity in the red zone are a bit of a ballast sentiment. As for today, JCI is expected to move in the range 5,965 – 6,079.
Investors are again interested in long tenor Government Securities (SBN), which still offer yields of between 6% and 7%.
JCI will try to stay above the 6,000 level after breaking through the strong resistance level yesterday. Investors will be watching the release of trade balance data which will be released today with a projected surplus of USD 2.6 billion. Today, the JCI movement range is expected to be between 5,959-6,079.
Apart from holding back its benchmark interest rate, the European Central Bank (ECB) has also added liquidity injections to the financial system.
The arrival of Covid-19 vaccine in Indonesia, as well as cigarette excise tax hike influenced JCI’s movement during the past week. Meanwhile, foreign exchange reserves came out slightly lower. However, JCI still closed in the green on a weekly basis.
The JCI still managed to strengthen by 2% last week with the level of 6,000 still being a strong resistance point. This week, investors will observe several economic agendas, such as the release of the November Trade Balance and the results of the Bank Indonesia RDG. For today, JCI is expected to consolidate in the range 5,911-5,980.
Under the 2021 Macroeconomic assumptions, the government is targeting an economic growth of 4.5% – 5.5%. If this recovery can be achieved, Indonesia will return to its long-term economic growth.
Meanwhile, NHKSI research sets a base case 2021 JCI target of 6,800; which implies a forward P/E of 18.1x. Our top picks for 2021 include: Banking (BBNI, BMRI); Consumer Goods (MYOR, KLBF); Telecommunication (TOWR, TLKM,EXCL); and Property (CTRA, PWON).
The running of regional head elections has pushed the bond market back to consolidation. Yesterday’s trade was also supported by external sentiment, the election of Janet Yellen as US Treasury Secretary will bring a pro-stimulus policy.
The announcement of cigarette excise tax hike put pressure on JCI as big caps shares such as HMSP and GGRM were experiencing lower limit auto rejection. For today, JCI will try to stay above 5900 with projected movement in around 5,911-6,004.
