For Friday trading (07/17/2020), IHSG is expected to still experience positive effect of the BI-7DRRR reduction, although it is limited. Bank Indonesia has again cut its benchmark interest rate in the past 2 months to 4.00%. In addition, investors will also pay close attention to the effects of extending PSBB in Jakarta.
The JCI movement tends to be flat in responding to yesterday’s Trade Balance data which recorded a surplus. Meanwhile, the market also estimates that Bank Indonesia will maintain the 7-DRRR benchmark interest rate which will be announced this afternoon.
The JCI movement today is estimated to be able to strengthen in a limited manner. Announcement of June 2020 trade balance data which is projected to still have a surplus, will be the main focus for investors.
The JCI movement tends to follow the movements of the Asian regional exchanges while waiting for the release of trade balance data scheduled for tomorrow. The majority of Asian exchanges yesterday strengthened as a result of news that two Covid-19 vaccines had entered the fast track of licensing in the US.
The burden sharing scheme agreed between the government and Bank Indonesia may have an effect in increasing inflation.
JCI movement mostly supported by economic data such as the Consumer Confidence Index that booked strengthening and increasing foreign exchange reserves. Meanwhile, the burden sharing policy of the government and Bank Indonesia has received quite positive response from investors.
JCI movement this week will be influenced by the release of some economic data such as the trade balance and the announcement of the BI-7DRRR benchmark interest rate. But the sharp increase in new cases of Covid-19 will aggravate the JCI step this week.
Today’s JCI movement may potentially weaken. The daily case numbers booked yesterday reach record high at 2.657 cases, which will be the main burdening sentiment for JCI towards the weekend.
The JCI today will try to stay above the 5,000 level after yesterday finally broke through the psychological numbers. Banking stocks supported the rise in the Jakarta Composite Index (JCI) as the government starts distributing stimulus and agreement of burden sharing scheme by the government and BI.
