Foreign investors continued buying local stocks on Thursday (Mar 9) as they booked net buy of Rp156.6 billion, cutting year-to-date net sell to Rp1.14 trillion. The composite index of the Indonesia Stock Exchange (IDX) gained 0.16% to close at 5,402 yesterday. Foreign investors’ investment in Indonesian bonds added Rp27.47 trillion year to date. The improving macroeconomic data this year would attract more capital inflow. Meanwhile the rupiah weakened back to Rp13,373 against the U.S. dollar on Thursday.

This morning Asian stocks edged up and the dollar rose to 1-1/2-month highs versus the yen ahead of the U.S. non-farm payrolls report due later in the day, Reuters reported. Wall Street was marginally higher overnight, underpinned by speculation the widely-anticipated labor market report on Friday would show U.S. payrolls growth in February was far more than economists forecast.

Also of key concern to the broader risk asset markets were the developments in crude oil, which saw prices fall to more than three-month lows overnight as record U.S. crude inventories fed doubts about the effectiveness of OPEC’s recent deal to curb a global glut. This morning, Nymex’s crude oil regained 0.81% to US$49.68 per barrel in Asian trading. The European Central Bank (ECB) held its benchmark refinancing rate at 0 percent for the ninth consecutive meeting and left the pace of its bond-purchases unchanged on March 9th, as widely expected.

At home, retail sales in Indonesia increased 6.3% year-on-year in January of 2017, compared to a 10.5% gain in the previous month. It was the lowest growth since July 2016, as sales rose at a slower pace for food, beverages and tobacco (7.3% from 10.5% in December); communications equipment and information (12.5% from 21.4%), cultural goods (7.8% from 12%), and motor vehicles and parts (16.6% from 27.6%). Motorcycles sales in February reportedly declined 12.8% to 481,241 units, from 551,930 units in January 2017.

While sales went up at a faster pace for household equipment (2.2% from 0.8%). In addition, sales of clothing (-14.4% from -6.4%) and fuel fell more (- 9.9% from -9.3%). Retail sales year on year in Indonesia averaged 12.39% from 2006 until 2017, reaching an all time high of 40.30% in January of 2010 and a record low of -26.30% in November of 2008.

CORPORATE NEWS

State-owned construction firm Wijaya Karya (WIKA) plans to raise Rp10 trillion fund this year, through issuing bonds and loans from syndicated banks. WIKA targets to seek Rp5 trillion loan from banks with tenor of 3 years. For bonds, WIKA targets Rp10 trillion funds within 5-10 years.

The Company needs funds to financing its toll road projects (Balikpapan-Samarinda section). WIKA sets its capital expenditure (capex) for this year at Rp7.7 trillion. It has internal cash of Rp6 trillion. WIKA has won the tender for toll project construction (Cengkareng-Batu Ceper-Kunciran section).

WIKA targets to book net profit of Rp1.22 trillion this year, a 20.45% rise compared to Rp1.01 trillion profit last year. It targets contracts to grow by 23.59% to Rp102.94 trillion this year, from Rp83.29 trillion last year.

State-owned construction firm Adhi Karya (ADHI) also plans to issue bonds worth Rp3.5 trillion in first half of this year, part of its Rp5 trillion bond issue program. ADHI targets to book new contracts of Rp44 trillion this year. It also targets sales to grow 26% to Rp14 trillion this year. While net profit is expected to reach Rp503 billion this year.

Indomobil Finance, unit of Indomobil Multi Jasa (IMJS), issued bonds worth Rp410 billion, carrying annual coupon rate at 8-9.4%. Asia Pasific Fibers (POLY) sets capecx of US$20 million for this year for upgrade and revamping its machines. It is also seeking partners for developing purified terephthalic acid (PTA) business.

Bread maker Nippon Indosari Corpindo (ROTI), producer of the famous Sari Roti, booked net profit of Rp280 billion in 2016, up 3.4% from 2015. Revenues grew by 16% to Rp2.52 trillion but operating profit declined 2.3% to Rp443 billion.

DISCLAIMER: AUTHORS HAVE NO POSITION IN STOCKS MENTIONED

By Yohannes Obor & Bahrul Qamar

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