Most stock indices in Asia fell on Tuesday's trading day (10/11) on concern that China's stalling economy negatively impacts on the pace of global economic growth, while markets are also bracing for a looming US interest rate hike before the year-end. Moreover, sentiments in Southeast Asia are not positive as the majority of Q3-2015 earnings reports have been unfavorable. Combined, it triggers a flight to safer haven assets. Indonesia's benchmark Jakarta Composite Index fell 1.08 percent to 4,451.05 points.

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Shares in the Asia-Pacific were mixed after opening on Monday (09/11). While, Japanese shares touched a fresh 2.5 month high on a weaker yen and Chinese shares went up (despite disappointing trade data), shares in Indonesia, South Korea and Australia were down. Indonesia's benchmark Jakarta Composite Index fell approximately 0.50 percent after opening on Monday, while the Indonesian rupiah had depreciated 0.83 percent to IDR 13,676 per US dollar by 09:16 am local Jakarta time.

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On 8 November 2015, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic subjects such as an analysis of Indonesia's Q3-2015 GDP growth, an inflation update, overviews of Islamic banking and the taxi services industry, a rupiah & stock market update, and more.

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A Finance Ministry official said Indonesia's state budget deficit is likely to exceed the projected IDR 300 trillion (approx. USD $22 billion) in 2015, pushing the deficit to 2.7 percent of Indonesia's gross domestic product (GDP), dangerously close to the maximum 3 percent of GDP cap that is set by a 2003 law. In the original 2015 State Budget the government targeted a budget deficit of 1.9 percent of GDP. This target was then revised to 2.2 percent in September. However, another revision is needed due to poor tax revenue collection.

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Indonesian stocks and the rupiah are feeling the negative impact of news from the USA. Both Federal Reserve Chairwoman Janet Yellen and New York Federal Reserve President William Dudley said a Fed Fund Rate hike in December is a "live possibility" amid low US employment, continued GDP growth and confidence that inflation will rise to the US central bank's target range. As a result of these remarks gold dropped to a one-month low, stocks declined, while bond yields and the US dollar were pushed higher.

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Asian stocks continue to rise on positive market sentiments on Wednesday (04/11). Supported by gains on Wall Street overnight and higher crude oil prices (pushing energy stocks higher), most Asian indices surged. Investors seem to have more confidence in the world economy. Earlier this week data signal that manufacturing activity continues to expand in the US and Europe, while in China it is stabilizing. Indonesia's benchmark Jakarta Composite Index was up 1.43 percent to 4,597.69 points by 10:50 am local Jakarta time.

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Indonesian stocks and the rupiah outperformed their regional peers on Tuesday (03/11) after US stocks posted strong gains overnight on the back of a spate of acquisition deals and positive US manufacturing activity and construction spending data. Most Asian stock indices rose on these improved global market sentiments. Indonesia's benchmark Jakarta Composite Index climbed 1.53 percent to 4,533.09 points.

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Indonesia's benchmark stock index (Jakarta Composite Index) was one of the few Asian indices that bucked the trend on today's trading day (02/11). Whereas most Asian indices, led by Japanese shares, fell on concern about persistent manufacturing contraction in China, the Jakarta Composite Index managed to rise 0.22 percent to 4,464.96 points. Meanwhile, oil prices dropped and the US dollar extended losses against most emerging market currencies.

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On 1 November 2015, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic subjects such as approval of the 2016 State Budget, an update on stocks & the rupiah, the Trans-Pacific Partnership deal, Trikomsel Oke's default, the World Bank's doing business index, and more.

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Indonesian assets are leading declines in Asia's equity and currency markets on today's trading day after a 'hawkish' statement released by the Federal Reserve indicated that the US will not raise its Fed Fund Rate yet, but does seem to open a door to a December interest rate hike. Despite the good performance of US stocks on Wednesday (28/10), most Asian markets were down today. Moreover, solid factory output in Japan reduced chances of further stimulus measures in Japan (Japan's central bank is to meet this Friday).

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Emerging currencies in Asia, led by the Indonesian rupiah exchange rate, strengthened in the past week on positive economic data from the US and China, the world’s two largest economies. Companies in the US added more jobs than expected in June 2014, while manufacturing in China grew at its fastest pace in 2014. Improving economies of the US and China are important for Asian countries as it boosts Asian exports. Moreover, Indonesian inflation and trade data contributed to positive market sentiments.

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The Indonesian rupiah exchange rate depreciated slightly on Thursday (03/07). The US dollar gained as markets reacted to Wednesday’s ADP nonfarm payrolls report which showed that 281,000 jobs were added in the US private sector in June 2014, thus exceeding expectations. Furthermore, the market is optimistic that US employment data, released later today, will be positive too. According to the Bloomberg Dollar Index, the currency of Indonesia depreciated 0.04 percent to IDR 11,918 per US dollar.

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Although the benchmark stock index of Indonesia (known as Jakarta Composite Index or IHSG) was in the red zone prior to the release of Indonesia’s June inflation figure and May trade data, at the end of the day it finished slightly in the green zone. The IHSG climbed 0.13 percent to 4,884.83 points. The macroeconomic data that were released were positive and made market participants engage in stock trading. Moreover, the index was supported by Asian stock markets that were mostly up as well as the appreciating rupiah exchange rate.

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Despite Hong Kong’s falling Hang Seng Index (HSI), the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) managed to climb 0.69 percent to 4,878.58 points on Monday (30/06). A number of reasons can be cited that positively influenced the performance of the IHSG. These are higher US Michigan Consumer Sentiment, positive forecasts for tomorrow’s release of June inflation and the May trade balance of Indonesia, declining global oil prices and the appreciating Indonesian rupiah exchange rate.

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The Indonesian rupiah exchange rate is appreciating sharply on Monday (30/06). By 15:13pm local Jakarta time, the currency of Indonesia had strengthened 1.31 percent to IDR 11,838 against the US dollar. Main factors that cause this performance are the weakening US dollar (as a slowdown in the US economic recovery evokes expectations that the Fed Rate will not be raised soon) and falling oil prices; the US benchmark West Texas Intermediate declined 30 cents to USD $105.44 in mid-morning trade while Brent crude fell 22 cents to USD $113.08.

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Although the Indonesian rupiah exchange rate appreciated 0.86 percent to IDR 11,995 per US dollar on Friday (27/06) as economic data from China, South Korea and Taiwan sparked optimism that regional growth has picked up, the recent depreciating trend of Indonesia’s currency burdens the country’s manufacturing industry. This industry is still dependent on imports of raw materials, capital goods and auxiliary materials, which are paid using US dollars causing the domestic industry to feel the financial impact of a weaker rupiah.

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The Indonesian rupiah exchange rate depreciated considerably on Wednesday (25/06) after Indonesia’s central bank (Bank Indonesia) said it would allow rupiah depreciation in an attempt to boost competitiveness of the country’s exports, while curbing imports. This strategy will have a positive impact on the country’s troubled trade balance. Based on the Bloomberg Dollar Index, the currency had weakened 0.67 percent to IDR 12,070 per US dollar by 14:30pm local Jakarta time.

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The performance of Indonesia’s benchmark stock index (known as Jakarta Composite Index or IHSG) was similar to the performance at the start of last week, possibly influenced by the presidential debates that took place a day prior to the past two Mondays. These debates, between the two presidential candidates (Joko Widodo and Prabowo Subianto), are broadcast live on national television and are important to outline each candidate’s vision and mission to the people. On 9 July 2014, Indonesians will vote for a new leader.

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The Indonesian rupiah exchange rate depreciated 0.62 percent to IDR 11,893 per US dollar on Tuesday (17/06), a four-month low. The main reason behind this poor performance is increased concern about the impact of violence in northern Iraq - namely higher global oil prices - on Indonesia’s trade and budget deficits as Indonesia subsidises a significant amount of domestic fuels). As oil and gas imports accounted for about 23 percent of total imports of Indonesia in April 2014.

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In the past week, the global crude oil price has increased considerably due to geopolitical tensions in Iraq which can disturb oil supplies from the Middle East. Up to the end of 2014, provided that no exceptional developments occur, the oil price is expected to range between USD $105-110 per barrel. Meanwhile, the Indonesian government announced that, despite the higher oil price putting pressure on the government’s budget balance, it will not increase prices of subsidized fuels this year.

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