Waiting for Trump’s vow

JAKARTA. This week, Donald Trump will be inaugurated as the 45th President of the United States of America (the US).

Market participants are waiting for Trump’s policy, mainly in terms of increasing the US economy. Therefore, up until Trump’s inauguration in the next week, global stock markets, including in Indonesia might be depressed. “Markets would adopt wait and see stance and tend to be corrected,” Director of Investa Saran Mandiri Hans Kwee told KONTAN, Sunday (15/1).

During the last week, Jakarta Composite Index (JCI) has dropped by 1.38%. The first Trump’s speech had depressed the global stock exchanges. The investors were disappointed, as Trump did not specify his economic policies in a detail manner.

Senior Analyst at Binaartha Parama Sekuritas Reza Priyambada said, the markets recently are more focusing on the Trump’s cabinet announcement rather than the Trump’s cabinet. Information has it that alumni of Goldman Sachs will sit in Trump’s Economic Team.

According to Reza, public consider Trump as a businessman. Therefore, Trump might appoint some professionals from global corporations with strong capitalist image as the ministers. In this case, markets will be disappointed if Trump sends ambiguous messages again. In this case, the uncertainties may usually depreciate the US dollar.

Hans said that the market participants are adapting wait and see stance, mainly in terms of Trump’s policy related to infrastructure development program.

If Trump’s policies fail to meet markets’ expectations, the US’ stock exchange would be corrected. This would subsequently affect to global stock markets. However, Hans estimates, this would not bring significant impact to the JCI in this week. He predicts that JCI will move at support level at 5,250-5,200 and at resistance level at 5,360-5,400.

Head of Research at Universal Broker Indonesia Satrio Utomo said, foreign investors in Indonesia’s stock exchange recently prefer to ‘sell’. However, the selling position might not too significant so that the JCI might stay at the level of around 5,300.

According to Satrio, JCI is predicted to be more stable two weeks after the inauguration of Trump. (Muhammad Farid/Translator)