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Bank Indonesia's foreign exchange reserves have fallen by US $4 billion to US $108.8 in January from US $112.8 in December 2012. The current reserves translate to six months of imports and short-term government debt payments. Reasons behind the four percent decline are massive spending by Indonesia's Central Bank to support the weakening IDR rupiah in combination with overseas debt payments.
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The Jakarta Composite Index (IHSG) rebounded on Thursday's trading day (17/10), supported by good news from the United States where finally an agreement was reached regarding the US debt ceiling. This agreement brought positive market sentiments on Asian stock markets, including the IHSG which rose 0.59% to 4,518.93 points. Moreover, Indonesia's minister of Economy Hatta Rajasa stated that Indonesia had not been significantly impacted by the US shutdown issue and this statement also managed to ease investors' concerns.
Although part of the market players on Indonesia's Stock Exchange (IDX) engaged in profit taking after Indonesia's benchmark index (IHSG) climbed for two consecutive days, the index still posted growth of 0.71 percent to 4,418.64 points on Thursday (03/10). Factors that contributed to today's gain were the depreciating US dollar as no solution has been found yet concerning the shutdown, generally rising Asian stock indices and the positive message that is conveyed in the APEC meeting in Bali.
Despite some appetite for profit taking, the key stock index of Indonesia (IHSG) was able to rise 0.96 percent to 4,387.60 points on Wednesday (02/10). The index was supported by the appreciating rupiah, a few rising Asian stock indices and foreign net stock purchases. The Indonesian rupiah rose against the US dollar as the latter was impacted upon by the debt ceiling and shutdown issue in the USA. Asian stock indices were mixed. Concerns about the shutdown were offset by rising Asian currencies against the US dollar.
Both the Indonesian currency and the benchmark stock index (IHSG) continued their fall on Tuesday (24/09). Wall Street's weak performance on the last three trading days was a major factor that brought negative market sentiments to the Indonesia Stock Exchange (IDX). Even good openings in Europe were not able to push the IHSG back into green territory. The index fell 2.25 percent to 4,460.41 points. Foreign investors were net sellers of Indonesian stocks, while domestic investors were net buyers.
Indonesia's benchmark stock index (IHSG) extended its downward movement on Monday (23/09) as investors continued to look for profits after the index had risen sharply following the announcement that the US quantitative easing program will not be ended yet. Pressures on the IHSG were intensified by the depreciating rupiah and the weakening of Hong Kong's Hang Seng Index (which was partly brought on by a typhoon). Despite foreign investors being net buyers of Indonesian stocks, the IHSG fell 0.46 percent to 4,562.86 points.
Market participants are waiting for the outcome of the Federal Reserve's FOMC meeting, which will deal with the future of the quantitative easing program. The wait and see attitude of investors made the benchmark index of Indonesia (IHSG) fall 1.20 percent to 4,463.25 points. Few big cap stocks were able to rise and although some second liners were up, it was not enough to push the IHSG into the green zone. The rupiah continued to weaken and foreign investors were again mostly selling their Indonesian assets.
Investors all around the world are in anticipation of the Federal Reserve's decision to scale back the monthly USD $85 billion bond-buying program known as quantitative easing (QE3). If indeed scaled back, then another important question remains: how much will the bond-buying program be toned down? Today (18/09), is the last day of the Fed's FOMC meeting in which these decisions are made. The market expects no drastic end to the program, instead a gradual toning down (between USD $10 to $20 billion) is anticipated.
After a strong performance yesterday, the Jakarta Composite Index (IHSG) fell 0.10 percent to 4,517.62 points on Tuesday (17/09). Part of the investor community grabbed their chance to engage in profit taking after yesterday's gain but most investors are careful and reluctant to make any major decision prior to the result of the Federal Reserve's FOMC meeting (17-18 September). It is expected that after this meeting there will be more clarity about the future of the Fed's quantitative easing program.
Indonesia's benchmark stock index (IHSG) could not continue its rebound on Wednesday (04/09). Amid mostly falling Asian markets, the IHSG fell 2.17 percent to 4,073.46 points. Asia was on a four-day winning streak but after president Obama received support from the Republican speaker of the House of Representatives, John Boehner, regarding military actions in Syria, global investors shied away from riskier assets. Indonesia and India are currently viewed as weak investment targets due to the countries' current account deficits.
The decision of Indonesia's central bank (Bank Indonesia) to raise its benchmark interest rate by 50 basis points to 7.00 percent and its deposit facility (Fasbi) by 0.50 percent to 5.25 percent seem to have had a good impact on the value of Indonesia's stocks and the rupiah. Indonesia's benchmark stock index (IHSG) rose 2.23 percent to 4,195.09 points on Friday (30/08), implying a three-day winning streak. Since the first trading day of this year, the IHSG is down 3.47 percent.
