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


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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