Daily Commentary (26-Oct): Lower Trading Volume Due to Rising Global Risk Off Sentiment

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Trading volume in the secondary market was reported less than Rp4tn on Friday (vs. Rp18tn average trading per day ytd). Interestingly, foreign has kept posting net inflow by Rp1tn – more for benchmark series (inflows of Rp732bn).

Thus, foreign inflow to INDOGB has already reached +Rp13tn in the last six days. According to DMO data, foreign ownership in government bond based on settlement date as of 25-Oct (reflecting trading on 23- Oct) was at Rp859.1tn (inflow of Rp8.3tn mtd or +Rp23tn ytd) or 37.1 % of total outstanding. The 10 year government bond yield was up 6.6 bps to 8.69% (+237 bps YTD).

JCI was up 0.5% to 5,784.9 (-3.2% mtd or -9.0% ytd) on Friday. Stock trading value was reported at Rp7.2tn (vs. average daily trading of Rp 8.3tn ytd). Foreign investors also posted net inflow of Rp388.9bn (but still outflow of Rp5.7tn mtd or -Rp56.8tn ytd).
Meanwhile, rupiah today depreciated 0.2% to Rp15,216/USD (depreciated 2.1% mtd or -12.1% ytd). Thus, over the week, JCI fell 0.9%, 10yr government bond yield was up slightly by 2.4 bps, and rupiah depreciated 0.2% against USD.

On the global market, the US stock continued falling at the end of the week as the Dow Jones decreased 1.19% to 24,688.3 and S&P 500 fell 1.73% to 2,658.7, although 3Q18 US GDP growth was reported at 3.5% qoq or stronger than market expectation of 3.3%. For the week, the S&P slumped 3.9% and the Dow slipped 3%. Meanwhile, US Treasury prices rose, as weakness in equities drove some to safe-haven positioning; the 2yr yield fell 5 bps to 2.81% and the 10yr yield shed 6 bps to 3.08%. The US December WTI crude oil settled +0.4% at USD 67.59/bbl but posted a third straight weekly loss. (Source: Mandiri Sekuritas)

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