A better outcome in 4Q19 brings a better prospect for the Indonesia fundamental, supported with the highest foreign exchange (forex) reserves since Jan-18.
In January, our portfolio declined by only 1.4% outperforming the JCI which dropped by 5.7% (-4.2% in USD terms) weighed down by the unexpected shock from the coronavirus outbreak.
It is very uncommon for Indonesia to have a relatively low Inflation in the beginning of the year where the last January inflation that under 3% in yearly basis was in 2019.
Dec-19 is the only month which successfully recorded positive growth on export within 2019 and the first increase in exports since Oct-18. The data completed the overall 2019 trade performance where the deficit was due to the deficit from oil and gas (OG) sector.
Indonesia has passed many economic hurdles in 2019 but still managed to carry on. Some rosy aspects that may help the economy to get through, they are monetary sector, political stability, fiscal sector, and trade performance.
The reason of the unchanged rate is because BI expects better macroeconomic indicators coming in 4Q19 ahead such as slight global economic growth recovery, stronger consumption approaching the year end, appreciation trend of the currency and the relatively low inflation.
The increase in imports of consumer goods surged approaching year-end holidays whereas exports shrunk for 13rd straight month since Nov-18.
The core inflation came lower compared to the headline inflation as the inflation in Nov-19 was built from the food baskets that were more likely related to temporary factors that may reverse themselves later.
The JCI posted a loss of 0.8% Ytd to 6,146 and underperformed the region because of risks arising from escalation of global trade war while domestic macro environment is not supportive of equity market due mainly to slowdown in economic growth and widening current account deficit...