• Performance of Indonesian Stocks Depends on Subsidized Fuel Policy

    Indonesia’s fuel subsidy policy is estimated to have a large influence on investors’ confidence in the financial or fiscal fundamentals of Southeast Asia’s largest economy and thus on the performance of the local stock index and currency. New president elect Joko Widodo (popularly known as Jokowi) is expected to raise prices of subsidized fuels after taking office in late October 2014 in an attempt to combat the country’s wide current account deficit (mainly caused by expensive oil imports to meet domestic fuel demand).

    Read column ›

  • Insurance Business in Indonesia: Foreign Investment still Welcome

    Indonesian parliament (DPR) decided not to limit foreign ownership in Indonesian insurance companies. Currently, foreigners can have an 80 percent stake in a local insurance company. A new insurance bill on this matter is expected to be passed in a plenary session next month. This bill will enable foreign investors to continue to own local insurance companies through the share-purchase mechanism at the Indonesia stock exchange (IDX). Another important point in the new bill involves the legal entity of the local insurance firm.

    Read column ›

  • Bank for International Settlements: Emerging Markets Vulnerable

    The Bank for International Settlements (BIS) wrote in its most recent report that emerging economies, which includes Indonesia, are highly vulnerable to severe capital outflows as investments from the West have been highly speculative and can be quickly pulled out from emerging markets. Even when only a light shock occurs, capital outflows will be significant as international investors have been showing ‘herd behaviour’. This behavior can rock the financial fundamentals of emerging markets and leave these countries shattered.

    Read column ›

  • Indofood Sukses Makmur and Golden Agri Resources Are Global Leaders

    Two Indonesian companies - Indofood Sukses Makmur and Golden Agri Resources - joined the ranks of the Boston Consulting Group’s Global Challengers 2014. This index contains a group of 100 companies (all from emerging markets) that are vying for leadership of key industries and have emerged as drivers of global economic growth. The Boston Consulting Group (BCG) also included Indonesian agribusiness firm Wilmar International in the graduates list. This list mentions firms that have grown into global market leaders in their industries.

    Read column ›