On Monday (May 2), the Central Statistics Bureau (BPS) reported that Indonesia had recorded 0.45% deflation in April 2016 month-to-month (m/m). Traditionally, Indonesia experiences deflation in April as food prices ease due to the harvest season. This year, however, deflationary pressure was higher than usual as, per 1 April 2016, Indonesia’s premium gasoline and diesel fuel prices were cut by Rp500 per liter, thus curtailing transportation costs. Indonesia’s annual inflation rate now stands at 3.60% (y/y).
BPS stated that the lower fuel prices resulted in a 1.60% (m/m) decline in transportation costs in April, while the price of rice (the main staple food for Indonesians) fell 1.2% (m/m) due to the harvest season. Meanwhile, core inflation—which excludes volatile food and administered prices such as subsidized fuel and electricity—eased to 3.41% (y/y), from 3.50% (y/y) in the preceding month.
In the months ahead, inflationary pressures are expected to grow as the Ramadan month (the holy Islamic fasting month) will start in early June. Although this is a month of self-control, consumption on food items (in the early morning or in the evening), clothes, shoes and bags usually increases.
The composite index of the Indonesia Stock Exchange (IDX) fell 0.6% to close at 4,808 Monday (May 2) with foreign investors booking net sell of Rp503.8 billion, cutting year-to-date net buy to Rp3.89 trillion.
Investors mostly sold shares of Telkom (-6.2%), HM Sampoerna (-9.7%), Perusahaan Gas Negara (-4.7%), Indocement (-4.9%), Media Nusantara Citra (-18.3%), Semen Indonesia (-6.8%), Bank Rakyat Indonesia (-7.2%), and Bank Negara Indonesia (-11.5%).Otherwise, the gainers yesterday were Unilever (+2.9%), Gudang Garam (+12.4%), Bank Central Asia (+2.8%), Surya Citra Media (+13.1%), Chandra Asri (+42.6%), and Global Mediacom (+38.3%).
The Government of Indonesia will today offer the Islamic bonds or sukuk through auction, targeting to raise Rp4 trillion.
CORPORATE RESULTS
PT Charoen Pokphand Tbk (CPIN), largest feed producer in Indonesia, reported a 77% growth in profit attributable to equity in first quarter (Q1) of 2016, to Rp762 billion as revenues rose 22.7% to Rp9.24 trillion. Operating profit increased 4.1% to Rp964 billion. Weak rupiah, while most materials are mostly imported, affect the CPIN’s earning outlook.
State cement producer PT Semen Indonesia Tbk (SMGR) and cement maker PT Indocement Tunggal Perkasa Tbk (INTP) reported a profit decline in first quarter of 2016. SMGR’s profit fell 13.2% to Rp1.03 trillion while INTP’s profit declined 16.4% to Rp958 billion. SMGR’s revenue declined 5% to Rp6.02 trillion and INTP’s revenue fell 9.2% to Rp3.93 trillion.
DISCLAIMER: AUTHORS HAVE NO POSITION IN STOCKS MENTIONED
By Yohannes obor & Bahrul Qamar
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