Indonesian Market Analysis

15 March 2023 04:12

Now let's take a look at the Indonesian stock market today on Tuesday, the Indonesian composite index was down 2,14%, 

Jakarta composite index tumbled today following a sharp selloff in banking stocks in The United States, as a major tech lender said it had to sell shares to plug a hole in its finances, despite a statement from the country’s monetary authority that it has insignificant exposures to the banking fallout in The US.

The selloff is a sharp turnaround for the global banking sector. On one hand, high interest rates have been a boon for banks, helping them make heftier returns on loans to households and businesses and as savers deposit more of their money into savings accounts.

But, on the other, some large banks that had scooped up expensive treasuries and other bonds when interest rates were very low, are sitting on losses as borrowing costs have risen and bond prices have gone down.

Banks heavily exposed to the tech sector, are particularly at risk as cash hungry startups withdraw their deposits.

As we can see, technology sector fell 2,55%. based on index points,
Goto dropped 4,7%, And Buka Sunk 3,1%, And Elang Mahkota Shed 5,7%.

On the other hand, investors also kept a close watch on The US consumer price index for February, due to be released tonight.

It could add to the fed’s conundrum on whether it should stay on its rate hike path. To tame persistent price pressures, or to hold back on tightening monetary policy further, to give the banking system some breathing space.

Investors also await Bank Indonesia, which will decide on an interest rate policy, which is projected to remain at the level of 5.75%.

Rupiah was down, as fears of a broader systemic crisis following the collapse of a US tech-focused lender, left traders speculating that the federal reserve could pause its aggressive rate hiking cycle.

Market pricing now shows a 31% chance, that the fed would keep rates on hold at its policy meeting next week, with rate cuts expected as early as June and through the end of the year.

And tomorrow's index is expected in the range of 6.727- 6.830. and rupiah will be moved between Rp15.290 - Rp15.475.