Contrary to the positive performance of most emerging market stocks, Indonesia's benchmark Jakarta Composite Index fell more than one percent on Monday (15/08). While other markets were supported by advances in crude oil prices and a rally in Chinese shares, Indonesian shares declined on the nation's weak trade data that were released by Indonesia's Statistics Agency today. Investors were eager to use this opportunity to engage in profit taking as the Jakarta Composite Index nearly touched a record-high level after an impressive recent rally.

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Indonesian assets made a remarkable performance on Monday (01/08). Indonesia's benchmark Jakarta Composite Index surged 2.79 percent to 5,361.58 points, while the rupiah appreciated 0.50 percent to IDR 13,047 per US dollar. Indonesian stocks - by far - outperformed their counterparts in other Asian Pacific nations. Overall, the majority of Asian stocks rose today on the back of waning expectations of another US interest rate hike in the near future.

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After being in green territory for almost the entire trading day, Indonesia's benchmark Jakarta Composite Index suddenly plunged into deep red in the last 1.5 hours of trading on Friday (29/07). HM Sampoerna, one of the largest companies on the Indonesia Stock Exchange in terms of market capitalization, shocked analysts by plunging 9.70 percent. Another huge company, Unilever Indonesia also put severe pressure on the Jakarta Composite Index by plunging 5.75 percent on Friday.

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Indonesian stocks and the rupiah performed well on the day that President Joko Widodo announced his cabinet reshuffle, while Japan announced a larger-than-expected economic stimulus package to boost the local economy. The benchmark stock index of Indonesia (Jakarta Composite Index) surged 0.96 percent to 5,274.36 points, while the Indonesian rupiah appreciated 0.29 percent to IDR 13,137 per US dollar (Bloomberg Dollar Index) on Wednesday (27/07). Lets take a closer look.

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Positive sentiments caused by the Group of 20 economies meeting in China have waned, hence most Asian stocks are lower on Tuesday (26/07). Instead, negative sentiments are caused by falling shares on Wall Street overnight as well as the declining crude oil price (touching a near three-month low). Market participants are also in 'wait and see-mode' ahead of the Federal Reserve's July two-day policy meeting (that starts later today) and the two-day policy meeting of the Bank of Japan that starts on Thursday.

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It was another impressive day at the office for the Indonesia Stock Exchange. Indonesia's benchmark Jakarta Composite Index (IHSG) surged 1.35 percent to 5,242.82 points on Wednesday (21/07). After Thailand's benchmark index, the Jakarta Composite Index was the best performing index in Asia today. Overall, Asian markets were mixed as most investors seem to reassess the global economy after the International Monetary Fund (IMF) decided to cut its global growth outlook (modestly) on Tuesday (19/07).

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The central bank of Indonesia (Bank Indonesia) announced today (14/07) that the nation's foreign exchange reserves rose by USD $6.2 billion to USD $109.8 billion in June 2016. The rise was supported by foreign exchange receipts, primarily from the issuance of government US dollar-denominated bonds, the auction of Bank Indonesia foreign exchange bills, tax revenues, oil & gas export earnings, as well as the withdrawal of foreign-denominated government loans.

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In the post-Brexit reality, stocks have been performing well, worldwide, with the exception of the week of 4 July when markets were hit by profit-taking amid heightened concern about the world's economic fundamentals. Apart from that week (when Indonesian markets were closed for a public holiday) stocks have been rallying, fueled by optimism about monetary stimulus from key central banks. So far this week, gains in worldwide stocks reappeared, fed by a positive (but not too positive) US jobs report and the prospect of more stimulus from central banks.

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The Indonesian rupiah has been rallying impressively over the past couple of days in the "post-Brexit" era. Amid severe uncertainty ahead of the Brexit referendum result, Indonesia's currency depreciated markedly on Thursday 23 June 2016. However, in the following days the rupiah started to strengthen, touching a two-month high against the US dollar (even though the US dollar has been strong as well due to the Brexit issue). Based on the Bloomberg Dollar Index the rupiah is now trading at IDR 13,175 per US dollar. What explains this recent rupiah strength?

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Indonesian assets are under pressure on Friday (24/06) due to the exiting of the United Kingdom from the European Union (EU). After votes of yesterday's referendum were counted the so-called "Brexit"is a reality. Nearly 52 percent of the 16.1 million voters chose to depart from the EU. Shortly after the news UK Prime Minister David Cameron announced he is to step down in October. Meanwhile, global financial markets are in deep red territory as investors are in search of safe haven assets such as the US dollar, Japanese yen, Swiss franc, and gold.

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Indonesia's main stock index (IHSG) went up 0.89 percent to 4,720.44 on Thursday (18/07). The index was supported by developments in the United States. On Wednesday (17/07), Ben Bernanke spoke to the US Congress and said that the Federal Reserve is likely to continue its bond-buying program in 2013 and may gradually withdraw the quantitative easing program in 2014. But only if economic recovery of the US provides the good context. This message supported the IHSG although foreign investors continued to record a net sale.

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Amid widespread profit taking, Indonesia's main stock index (IHSG) was able to post another day of limited growth on Tuesday (16/07). Asian stock indices, including the IHSG, were supported by rising American stock indices on Monday (15/07). Investors seem to be confident that Q2-2013 results of various Indonesian companies are positive and therefore engaged in stock trading although foreign investors were still mostly selling their Indonesian assets. At the end of today's trading day, the IHSG rose 0.18 percent to 4,644.04.

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After finishing last week with three consecutive days of gains, Indonesia's main stock index (IHSG) reached up to 4,633.11. However, its movement is still rather volatile. Property, finance and consumption stocks were sold by investors after seeing the benchmark interest rate raised by Bank Indonesia (by 50 bps to 6.50 percent) on Thursday (11/07), while metal stocks formed the main supporter of the index at the end of the week. Trading volume in the regular market hit 5.2 trillion and foreigners recorded net purchases of IDR 288 billion.

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Indonesia's main stock index (IHSG) was able to continue its rise on Thursday (11/07) despite mixed markets in the United States and Europe, that were waiting for the release of the Federal Reserve minutes, on the previous day. The minutes and Ben Bernanke's speech indicate that the bond-buying program will be continued for a while and this made investors decide to buy Indonesian assets, particularly large cap stocks such as Unilever Indonesia, Bank Mandiri and Indocement Tunggal Prakarsa.

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Today, Bank Indonesia surprised many analysts and investors by raising its benchmark interest rate by 50 bps to 6.50 percent. Indonesia's central bank assessed that this measure is the correct one with regard to supporting the IDR rupiah (which is one of the worst Asian currencies against the US dollar this year) and to fight higher inflation after the government decided to cut fuel subsidies in June. It expects inflation to peak in July at about 2.3 percent (month to month) but to moderate soon afterwards.

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Indonesia's central bank (Bank Indonesia) expects that economic growth of Indonesia in 2013 will not meet the government's target as has been set in the revised State Budget (APNB-P). Last month, both government and parliament of Indonesia agreed on a revised GDP growth assumption of 6.3 percent. However, Bank Indonesia believes that, due to slowing domestic consumption and investments in the current global economic context, the growth is more likely to fall between 5.8 and 6.2 percent.

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Higher American indices after the release of ADP employment change and lower initial jobless claims made an indirect impact on Asian stock indices, including Indonesia's main stock index (IHSG) on Thursday (04/07). Investors used the positive outcomes of these data to start purchasing stocks, although in limited quantities. Foreign investors, however, are still selling more Indonesian shares than they buy, which subsequently results in limited growth of the IHSG on Thursday (04/07). The index grew 0.10 percent to 4,581.93.

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Indonesia's main stock index (IHSG) took another large blow on Wednesday (03/07). The index fell 3.20 percent to 4,577.15 points as investors were worried after reading the revised outlook of the World Bank. The institution downgraded its forecast for economic growth in Indonesia in 2013 from 6.2 percent to 5.9 percent. Higher inflation, because of the recent subsidized fuel price hike, is expected to result in lower domestic consumption. The IDR rupiah posted a slight weakening to IDR 9,941.

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Weakening American and European stock indices on Tuesday (02/07), as investors mostly refrained from trading ahead of Wednesday when a number of important US economic data are released, caused negative market sentiments in Asia today (03/07). Moreover, the market responded negative towards the World Bank's July report in which the outlook for economic growth of Indonesia in 2013 was cut to 5.9 percent (from 6.2 percent). Lastly, a gap at 4,620 - 4,644 still needed to be closed.

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The World Bank has revised down its forecast for economic growth in Indonesia in 2013 to 5.9 percent from its original estimate of 6.2 percent. Similarly, the institution has altered its forecast for economic growth in 2014 from 6.5 percent to 6.2 percent. The revised figures were published in July's edition of the Indonesia Economic Quarterly (IEQ), titled 'Adjusting to Pressures'. The World Bank's forecast is also in sharp contrast with the GDP assumption of the Indonesian government, which puts economic growth in 2013 at 6.3 percent.

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