The OJKs Investment Alert Task Force also shut down PT Mahesa Strategis Indonesia and PT Amarta Investa Indonesia, which are alleged to have provided investment management services and financial advice without proper licenses. Follow along for live updates from Clemson University’s Board of Trustees meeting, which comes one month before classes start back. Walt Disney Co (DIS) is down after it announced it will be delaying the new “Mulan” movie indefinitely, and postponing “Star Wars” and “Avatar” for one year Wall Street closed sharply lower on Thursday owing to weak labor market data and heightening geopolitical tensions between the United States and China. Despite a downbeat day on Wall Street, there were some reasons to celebrate. The dire financial forecast from the Texas comptroller says a lot about the pandemic’s harsh impact on the economy. It’s based on uncertain assumptions about what will happen next — and could easily change again.
The Financial Services Authority (OJK) has instructed financial advisory company PT Jouska Financial Indonesia to cease operations over allegations of illegal stock brokerage and investment mismanagement.
The OJK’s Investment Alert Task Force also shut down PT Mahesa Strategis Indonesia and PT Amarta Investa Indonesia, which are alleged to have provided investment management services and financial advice without proper licenses. It has also blocked all three companies’ websites, applications and social media accounts through the Communications and Information Ministry.
The decision was made after the task force summoned and questioned Jouska CEO and founder Aakar Abyasa Fidzuno following complaints on social media from its clients.
“We’ve asked PT Jouska to settle the disputes with its clients transparently and invite the customers to settle the issues,” the task force said in a press statement. “We ask Jouska to process its licenses in line with its business activity as soon as possible.”
The task force revealed that Jouska received a license as an education-services company through the Online Single Submission (OSS). It further said in the statement that Aakar had accepted the decisions.
The case was uncovered when several clients and former clients of Jouska, which claims to be an independent financial advisory company and which gained its popularity among young investors via social media, took to Twitter, saying Jouska’s decision to invest their funds in low quality stocks had resulted in a slump in their portfolio values by more than 70 percent.
A former client also uploaded an offering letter and a contract he received from the company when using its services in 2018 and 2019.
The offering letter stated that aside from educating the client and helping them to pick the right investment instrument based on their profile, Jouska would have the right to manage the client’s funds, as well as to buy and sell stocks in their portfolio. The client then entered into a fund-management contract with Amarta Investa while others said they signed a contract with Mahesa Strategis.
The Jakarta Post has learned that Jouska, Amarta Investa and Mahesa Strategis are not registered as investment-management companies or securities companies at the OJK.
“Independent financial planners are not allowed to sell a financial product or investment management service to their clients,” financial planner Safir Senduk told the Post over the phone on Wednesday.
The International Association of Registered Financial Consultants (IARFC) Indonesia has stressed that a financial advisor is prohibited from managing clients’ funds and trading stocks in their portfolios even with full discretion and consent from the clients.
“We have to be proactive so we are now establishing a task force to list those who are claiming to be a financial planner but are actually in violation of the code of ethics,” said IARFC Indonesia chairman and president Aidil Akbar Madjid said on Thursday.
“We hope the people who want to use financial planners’ services will be aware of which ones are licensed and which are not,” he said, adding that the profession was still self-regulated and yet to be regulated by the OJK.
The Jouska case shared a similarity with the investment mismanagement that led to a corruption case involving ailing state-owned insurer PT Asuransi Jiwasraya, as both had used other parties’ funds to invest in questionable stocks, said University of Indonesia (UI) capital markets expert Budi Frensidy on Thursday.
“[Jouska] case’s impact may be small on our stock market, but it can discourage new and potential equity investors from trying to invest,” he said.
He suggested investors choose reputable and licensed asset-management firms to help them manage their investments if they do not feel confident enough to manage their own funds.
Jouska’s clients shared on social media their portfolio details revealing that the company invested the majority of their funds in newly listed computer hardware-trading company, PT Sentral Mitra Informatika, trading on the Indonesia Stock Exchange (IDX) under the code LUCK. Advisors at Jouska are also reported to have prevented clients from selling the shares when the prices had dropped more than 80 percent, an allegation that has neither been denied nor confirmed by the company.
Sentral Mitra, which was listed on the bourse on Nov. 29, 2018, saw its share price increase exponentially from Rp 285 (2 United States cents) to its highest level of Rp 2,020 apiece just around eight months after its IPO. Sentral Mitra’s share price has since dropped to near its IPO price, trading at Rp 322 on Friday.
Jouska previously claimed in a written statement that it always informed clients of all economic, industry and corporate analyses, including the risks in every financial decision. It also denied the claims that Jouska had full access to its clients’ securities accounts and had managed their funds.
“We are now building a credible and trusted capital market. [On that basis,] we call on people who want to invest in the capital market to always check out whether or not an advisor, investment manager or broker has a license,” the task force chairman, Tongam L. Tobing, said on Friday. (prm)
Author: The Jakarta Post
Clemson University could see up to $135 million negative financial impact due to COVID-19
Clemson University could take a financial hit of up to $135 million this year due to COVID-19, about a third of which would come from lost athletics revenue, according to university officials.
In a presentation to the board of trustees, Vice President of Finance and Facilities Tony Wagner said the pandemic has already had a “significant impact” on Clemson and estimations for the fiscal year indicate a loss of between $70 million and $135 million.
The school will spend up to $25 million on expenses related to preparing for in-person and online instruction, like buying face masks, upfitting classrooms with cameras and COVID-19 testing.
“We are providing testing to all of our employees and students, free of charge… there’s personal protective equipment that we’re providing and extraordinary cleaning expenses. Just a whole host of things that that are driving up our expenditures because of COVID,” Wagner told the board.
The potential loss of incoming international students – who may be barred from entering the U.S. due to a suspension of visa services – could lead to a loss of up to $20 million in tuition and fees, according to the presentation.
There are thousands of international students at Clemson. They make up 25% of the graduate school alone, according to enrollment data. Since March, the U.S. has indefinitely stopped issuing new or updated visas, keeping all new international students from travelling to campus this fall.
Overall enrollment is on track to grow 2% from last year, according to university officials.
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Athletics revenue may see up to $50 million in lost revenue due to a restriction in ticket sales so fans can be socially distanced at sporting events, including football games, Wagner said.
Other impacts on research funding and housing and dining fee refunds could add up to a $40 million loss of revenue, according to the estimates.
“We are going to revisit all of these expense issues and later this fall we will put in place a (Fiscal Year) 21 budget that will reflect the reality of where we’re at with the disease once we know a little bit more about it,” Wagner told the board.
Clemson approved a continuing budget in the spring since the state Legislature has yet to approve a new budget.
However, Pres. James Clements told the board Clemson was in a good position to “navigate the pandemic” and would come out financially strong.
“I’m proud of the progress we’ve made this year despite the very unique challenges we have faced, and I am confident fully confident that we will continue to succeed at the highest levels,” he told the board.
Clements added the university raised $158 million this year in private funding, the fourth year in a row Clemson has surpassed $150 million in donor giving.
“Private support is more important now than ever before due to these uncertain times,” he said.
During the board meeting, university leadership also detailed the reopening plan and approved housing and dining fees for the 2020-2021 school year.
Semester housing fees range from about $2,000 to $6,000, depending on the residence hall and room type. Housing rates for first-year students did not increase from last year, but continuing students saw a 3.7% housing fee increase, according to a presentation from Wagner.
Dining fees increased 2.3% from last year, Wagner said. The increases in rates are similar or lower than previous years, he added.
Since the university is delaying in-person instruction until at least Sept. 21, the board also voted to approve a 29% credit on all students’ housing and dining fees since those amenities will be closed during that time.
“The university is not passing along a significant amount of COVID-related revenue shortfalls and extraordinary expenses,” Wagner said.
All student fee items passed unanimously.
Zoe covers Clemson for The Greenville News and Independent Mail. Reach her at email@example.com or Twitter @zoenicholson_
Disney Stock Drops After Delaying Release of ‘Mulan,’ ‘Star Wars’ – Schaeffer’s Investment Research
The shares of Walt Disney Co (NYSE: DIS) are down 2.3% at $115.40 this morning, after the company announced it would push back the release of its new “Mulan” movie indefinitely, as movie theaters across the country remain shut to curb the spread of COVID-19. Disney also delayed the release of “Avatar” and “Star Wars” for one year.
On the charts, the security is struggling to recover from its early June pullback, with resistance at the $120 region keeping at lid on the shares. And while Disney shares have getting support from the 60-day moving average over the past few weeks, the stock is still off 18.3% year-to-date.
Analysts were split toward the equity coming into today, with 10 of the 18 in coverage carrying a tepid “hold” or worse rating, while the remaining eight carried a “buy” or better. Meanwhile, the 12-month consensus price target of $122.79 is a 5.8% premium to its current perch.
A look at Disney’s options pits, however, shows calls more than doubling puts. In fact, 101,321 calls were exchanged in the past 10 days, as opposed to just 51,259 puts. On the other hand, the stock’s Schaeffer’s open interest ratio (SOIR) of 0.86 stands higher than 72% of readings from the past year, implying short-term options traders have been more put-biased than usual.
Author: by Fernanda Horner
Stock Market News for Jul 24, 2020
Wall Street closed sharply lower on Thursday owing to weak labor market data and heightening geopolitical tensions between the United States and China. Selling pressure on the technology sector also pulled down the overall market. All three major stock indexes ended in negative territory.
The Dow Jones Industrial Average (DJI) tumbled 1.3% or 353.51 points to close at 26,652.33, reversing its three-day winning streak. Notably, 23 components of the 30-stock blue-chip index ended in the red while 7 finished in green. The Nasdaq Composite ended at 10,461.42, plummeting 2.3% or 244.71 points.
Meanwhile, the S&P 500 tanked 1.2% to end at 3,235.66, reversing its four-day winning run and marking its worst single-day performance in a month. The Technology Select Sector SPDR (XLK), the Communication Services Select Sector SPDR (XLC) and the Consumer Discretionary Select Sector SPDR (XLY) plunged 2.6%, 1.6% and 1.5%, respectively. Notably, eight out of eleven sectors of the benchmark index closed in negative territory while three in positive territory.
The fear-gauge CBOE Volatility Index (VIX) was up 7.2% to 26.08. A total of 10.77 billion shares were traded on Thursday, lower than the last 20-session average of 11.14 billion. Decliners outnumbered advancers on the NYSE by a 1.18-to-1 ratio. On Nasdaq, a 1.61-to-1 ratio favored declining issues.
The Department of Labor reported that Americans who filed for unemployment benefit for the first time came in at 1.416 million for the week ended Jul 18. The consensus estimate was 1.319 million. Notably, previous week’s estimate was revised upwardly to 1.307 million from 1.3 million reported earlier.
For eighteen consecutive weeks, initial jobless claims stood more than 1.3 million. However, this was the first increase in weekly jobless applications after a decline of fifteen successive weeks. On the other hand, continuing claims — the number of people that have received unemployment benefit at least one time earlier — decreased 1.107 million to 16.197 million for the week ended Jul 11.
Several technology bellwethers have plummeted to pull down the sector and the overall market. Microsoft Corp. (MSFT – Free Report) reported fourth-quarter fiscal 2020 non-GAAP earnings of $1.46 per share, which beat the Zacks Consensus Estimate by 5.8%. Revenues of $38.03 billion surpassed the Zacks Consensus Estimate by 3.95%.
However, the company reported its transactional license purchasing continued to slow and its subsidiary LinkedIn was negatively impacted by the weak job market due to coronavirus-induced lockdowns. Moreover, its cloud computing business unit Azure reported less than 50% growth first time ever.
Meanwhile, smartphone and tablet giant Apple Inc. (AAPL – Free Report) is facing consumer protection investigations in several states. Consequently, Microsoft and Apple plunged 4.4% and 4.6%, respectively. Both stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The lingering economic and geo-political conflicts between the United States and China have heightened recently. On Jul 23, U.S. Secretary of State Mike Pompeo slammed China over international abuses warning the Asian economic giant that United Sates will no longer tolerate China’s double standard.
Per Pompeo, “The truth is that our policies, and those of other free nations, resurrected China’s failing economy, only to see Beijing bite the international hands that fed it.”
On Jul 22, The U.S. government has instructed China to close its consulate in Houston citing the consulate was used for spying purposes. The U.S. government has already imposed trade sanctions on 11 major Chinese companies on accounts of violating human rights in China.
On Jul 21, the Department of Justice indicted two Chinese hackers of stealing trade secrets and trying to steal research on drugs for potential coronavirus treatment.
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Stock Markets Fall Friday as Gold Hits $1,900; Boston Beer Gets a Big Bottom-Line Win
Concerns about relations between the U.S. and China continued to add to stresses related to the coronavirus pandemic on Friday, pushing stock markets broadly lower. The declines were relatively modest, however, with the Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite all limiting their losses to less than 1%.
Data source: Yahoo! Finance.
Amid the rising levels of tension, demand for gold has emerged among investors as a potential safe-haven play. Yet what was truly surprising today were the earnings results that Boston Beer (NYSE:SAM) posted, as the maker of Sam Adams and other beer brands has managed to achieve amazing growth even in the middle of the pandemic.
Boston Beer shares jumped 26% on Friday, adding to huge gains so far in 2020. The beer maker’s second-quarter financial results confirmed the amazing performance that its business has achieved recently, and shareholders are optimistic about the company’s future as well.
Financially, Boston Beer remained in growth mode. Revenue jumped 42% from last year’s quarter, lifted in part by the acquisition of Dogfish Head a year ago. Earnings more than doubled year over year to $4.88 per share.
Image source: Boston Beer.
Boston Beer did take a hit from the COVID-19 pandemic, as keg demand from bars and restaurants plunged amid forced closures. The company also had to bear higher production costs due to safety measures.
However, the big success stories were Truly Hard Seltzer and Twisted Tea, both of which have prospered even as competing products have failed to get much traction. Overall, depletions soared more than 40% from year-ago levels, even excluding the impact of adding Dogfish Head, and shipment volumes jumped 35% organically.
With the gains, Boston Beer is now up 120% in 2020 and more than 500% since mid-2017. That’s a big jump for a beverage company , but Boston Beer has its finger on the pulse of consumer demand — at least for now.
Meanwhile, the precious metals markets continued to perform well. Gold prices were up $14 to $1,901 per ounce, while silver was up about $0.19 to just under $22.75 per ounce. Platinum eased lower, but palladium prices climbed more than 2%.
Gold’s popularity showed up in prices of related stocks. Streaming specialist Wheaton Precious Metals (NYSE:WPM) picked up more than 5% on the day, while gains for mining companies Harmony Gold (NYSE:HMY), Yamana Gold (NYSE:AUY), and DRDGOLD (NYSE:DRD) all topped 8%.
Investors appear increasingly convinced that gold and silver could be in a new bull market. Gold is nearing its all-time record levels, but silver could double and still be shy of where it traded in the early 2010s. For gold, the perceived stability of the yellow metal in geopolitical turmoil has been its main supporting argument. Silver, meanwhile, has enough industrial uses to benefit from hopes for an economic recovery.
Precious metals prices are often volatile, and gold could give up its gains just as quickly as it moved higher. Yet with fundamental conditions favoring investors, gold has the potential to keep climbing from here as well.
Author: Dan Caplinger
Analysis: Texas in a state of financial uncertainty
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It will be a miracle if Texas Comptroller Glenn Hegar and his team of financial prognosticators are right about the arc of the state’s economy over the next few months.
The LBJ State Office Building where they work is full of smart people, but they’re being asked to put numbers to their assumptions about the state’s fumbling response to the coronavirus pandemic and the economic recession the virus spawned.
Hegar himself, while presenting the latest forecasts for state revenues that will be collected over the next 13 months, won’t say he’s nailed it. He’ll say it’s his best estimate right now and then can spend as much time as you’d like describing the uncertainty of the terrain he’s been asked to map.
The short form: Texas state government will bring in $11.6 billion less during the current two-year budget than the comptroller forecast last year, ending with a shortfall of $4.6 billion and a balance of $8.8 billion in savings in the Economic Stabilization Fund, also known as the rainy day fund.
Texas lawmakers are constitutionally required to balance their budgets. Every two years, they find out how much money the comptroller thinks will come into the state treasury through taxes and fees and everything else, and they write budgets that spend no more than that amount.
When the comptroller is wrong — and the forecast is always wrong in some respect — they adjust spending up (usually) or down (not often, but stay tuned) to fit the situation. At the end of their last legislative session in May 2019, legislators knew they would have to spend more on Medicaid than they included in their budget. The plan is to come back in January and add what’s needed to that and other programs and services, a customary adjustment that will raise the overall size of the current budget.
Then they’ll write the next two-year plan. And because of the coronavirus recession, they expect not only to have less money to work with, but to be less certain about how much money they will have. The 2020-21 budget is tough, but manageable.
They’ll need a case of Maalox and a couple of gallons of CBD oil to get through the 2022-23 budget. So might the rest of us.
The comptroller is listing the assumptions not just to hedge his bets, but to let lawmakers and everyone else know that the numbers will change if the assumptions are off. Like the one about businesses and consumers resuming something like their normal economic lives around the first of next year, he said in a livestreamed interview with the Texas Tribune this week. Or that the gross domestic product will reach pre-pandemic levels by the end of 2021.
“Those are things that unfortunately nobody really knows right now,” Hegar said.
He tiptoed around the economic effects opening schools to in-person classes might have if, for example, it freed parents to go back to work. It’s hard to tie that directly to state revenue. And he declined to forecast the effect of potential business shutdowns in the coming months.
“We’re going to have to continue to learn how to live with the pandemic and be able to keep the economy open,” he said.
When the state puts a number on a prediction, it has the patina of precision and certainty. In the Tribune interview and elsewhere, the comptroller is trying to say, gently but persistently, that his estimates probably won’t hold. Some sample quotes:
Politicians are fond of telling voters that they’re trying to run government budgets the same way we run our family budgets. Now they’re in the same fix a lot of families are in, trying to figure out what they can spend over a period when their income is wobbly, and to follow that with spending decisions about the two years that follow.
And what to do, if and when it comes to it, when they find out they guessed wrong.
Disclosure: The Texas Comptroller of Public Accounts has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.
Author: Ross Ramsey