People familiar to the matter claim that US multinational technology firm Google will reach a tax settlement with the Indonesian government. Authorities in Indonesia have become increasingly uncomfortable with multinational companies that generate profit from an Indonesian online audience but lack a permanent presence in Indonesia in the form of a foreign investment company. This applies to various social media platforms as well as Google that only has a representative office in Indonesia, while transactions and revenue (generated in Indonesia) are booked at Google Inc's Asia Pacific headquarters in Singapore.

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Global credit rating agency Moody's Investors Service believes Indonesia's non-financial companies, specifically those engaged in the commodities sector, will see improving corporate earnings in 2017 due to rising commodity prices and the economic recovery of the USA. In a report released on Monday (21/11), Moody's states that commodity prices are expected to continue their upward movement in 2017. This will trigger investment in the mining, oil & gas and crude palm oil (CPO) sectors.

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The government of Indonesia is optimistic that realization of government spending through ministries and other government agencies can reach 95-96 percent of the target (that was set in the Revised 2016 State Budget) at the end of 2016. If indeed achieved, then it should manage to push gross domestic product growth of Indonesia slightly above 5 percent (y/y) both in the fourth quarter and full-year 2016 through the multiplier effect. However, is above-mentioned optimism about government spending realistic?

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There is plenty of news that is impacting on Asia's financial markets this morning: a big earthquake (as well as tsunami alert) occurred in Japan's Fukushima, the crude oil price surged to a three-week high, US stocks touched record high levels overnight, while Indonesian authorities officially banned another "anti-Ahok protest" rally. Most Asian stocks are rising on Tuesday morning (22/11) although Indonesia's benchmark Jakarta Composite Index started in the red. However, the index quickly entered green territory some time later. Meanwhile, the rupiah remains under pressure. Lets take a closer look.

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