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EMERGING MARKETS-Indonesian rupiah weakens as import slump fuels growth fears

Published 08/18/2020, 03:54 PM
Updated 08/18/2020, 04:00 PM
© Reuters.
USD/JPY
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USD/SGD
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JP225
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USD/IDR
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USD/MYR
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USD/PHP
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NSEI
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JKSE
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KLSE
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KS11
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TWII
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SSEC
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TPGC
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HTHB
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SETI
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PSI
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AIMS
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BMTR
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DMC
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STI
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RRHI
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MIAPJ0000PUS
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* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
* Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/3f2vwbA
* Most Asian FX up against a weaker dollar
* Glove makers lead gains in Malaysian stocks

By Shriya Ramakrishnan
Aug 18 (Reuters) - The Indonesian rupiah bucked gains among
Asian currencies in volatile trade on Tuesday as a slump in
imports stoked worries of a slow economic recovery, while stock
markets across the region tracked gains in the United States and
Japan.
Currencies across Asia's emerging markets were broadly
higher, helped by a weaker U.S. dollar and a tech-fuelled rally
on Wall Street overnight. MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS gained 0.6%.
The rupiah IDR= , however, underperformed, weakening up to
0.8% before paring losses as the current account numbers offered
a mix of signals on its economy.
The trade surplus in July was the biggest in nine years, but
came courtesy of a 33% plunge in imports, far steeper than the
22.48% drop predicted in a Reuters poll. "Although theoretically the huge trade balance surplus
should be good for the rupiah, investors seem to be shocked to
see such a contraction on imports," said Anthony Kevin, an
economist at Mirae Asset Sekuritas.
"It points out that our economic recovery would be very
gradual."
Bank Indonesia is due to wrap up a two-day policy review on
Wednesday, with a majority of economists in a Reuters poll
expecting it to keep interest rates unchanged after four
successive cuts this year to revive the economy. Shares in Jakarta .JKSE , in contrast to the rupiah, hit a
more than five-month high, boosted by gains in the financial and
consumer sectors and optimism over a state budget for 2021 that
pointed to higher spending for public works.
Philippine shares .PSI also staged a sharp rebound, rising
over 1% after two straight days of declines, as strict curbs in
and around the capital Manila eased and data showed a 7.7% rise
in June remittances from workers overseas.
Malaysian equities .KLSE registered their first session of
gains in three, as investors snapped up beaten-down shares of
glove makers after a steep sell-off last week triggered by news
of regulatory approval for a COVID-19 vaccine in Russia.
"Even if a vaccine is found for COVID-19 tomorrow, there
will be a need to wear gloves in a number of situations that
didn't exist before," said Gerald Ambrose, Chief Executive
Officer of Kuala Lumpur-based Aberdeen Standard Islamic
Investments.
"Demand will be there but of course capacity is expanding
and there will be a peak profit period and peak price but I
don't think we are there yet."

HIGHLIGHTS:
** Top gainers on the Jakarta stock index .JKSE include
Global Mediacom Tbk PT BMTR.JK up 25% at 290 rupiah, Akbar
Indo Makmur Stimec Tbk PT AIMS.JK up 24.42% at 214 rupiah
** In the Philippines, top index gainers are Robinsons
Retail Holdings Inc RRHI.PS up 4.35% at 64.7 peso, DMCI
Holdings Inc DMC.PS up 4.34% at 3.85 peso
** Top gainers on FTSE Bursa Malaysia Kl Index .KLSE
include Hartalega Holdings Bhd HTHB.KL up 9.25% at 17 ringgit,
Top Glove Corporation Bhd TPGC.KL up 7.85% at 24.18 ringgit


Asia stock indexes and
currencies at 0702 GMT
COUNTRY FX RIC FX FX YTD INDEX STOCKS STOCK
DAILY % % DAILY % S YTD
%
Japan JPY= +0.48 +2.97 .N225 -0.20 -2.56
China .SSEC 0.15 12.91
>
India INR=IN +0.10 -4.58 .NSEI 0.54 -7.07
Indonesi IDR= -0.54 -6.22 .JKSE 0.83 -16.0
a 0
Malaysia MYR= +0.08 -2.32 .KLSE 0.67 -1.11
Philippi PHP= +0.08 +4.26 .PSI 1.44 -21.2
nes 3
S.Korea .KS11 -2.46 6.85
>
Singapor SGD= +0.10 -1.60 .STI -0.38 -20.5
e 1
Taiwan TWD=TP +0.45 +2.43 .TWII -0.65 7.29
Thailand THB=TH +0.13 -3.98 .SETI 0.27 -16.1
6

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