In line with nearly all other Asian stock markets, Indonesia’s benchmark Jakarta Composite Index (IHSG) plunged 2.15 percent to 4,412.46 points on Tuesday (01/09). After Asian trade had closed European and US indices also plummeted severely. The main reason is today’s announcement that China’s manufacturing fell to a three-year low in August 2015, yet another sign that China’s economic growth is declining faster than estimated. The country’s manufacturing PMI dropped to 49.7 in August from 50.0 in July (a reading below 50.0 indicates contraction).

Read more ›

Darmin Nasution, Indonesian Coordinating Minister for Economics, told reporters on Thursday (27/08) that the government is set to announce a policy package aimed at supporting the rupiah. The package, set to become effective next week, involves deregulation and tax holidays. Further information is expected to be presented by Indonesian Finance Minister Bambang Brodjonegoro later today.

Read more ›

In line with major stock indices in Asia, Indonesia’s benchmark Jakarta Composite Index rebounded directly after the opening of trade on Thursday (27/08). The index surged 2.51 percent to 4,344.11 points. Most indices in Asia were up after the US Dow Jones Industrial Average climbed nearly 4 percent on Wednesday (26/08), effectively ending a six-day losing streak, on heightened expectation that the Federal Reserve will not raise its key Fed Fund Rate yet in September. However, markets are still plagued by severe volatility.

Read more ›

Last week, Indonesia’s central bank (Bank Indonesia) refrained from adjusting its relatively high interest rate regime as it is committed to support the ailing rupiah and combat high inflation. Another decision that was revealed by Bank Indonesia is the soon-to-be-introduced regulation that limits total (non-collateral) monthly US dollar purchases to USD $25,000 (down from USD $100,000 previously). This regulation will be implemented in a move to thwart speculators that want to take advantage of the weak and volatile rupiah.

Read more ›

The Indonesian rupiah continues to flirt with a 17-year low as the currency is getting closer and closer to the IDR 14,000 per US dollar level. Meanwhile, Indonesian stocks took another blow as the country’s benchmark stock index (Jakarta Composite Index) fell 2.39 percent on Friday (21/08). Such turmoil is not only confined to Indonesia but was felt across Asia and the West. Markets were plagued by selloffs in energy shares (due to falling oil prices) and uncertainty about the timing of higher US interest rates.

Read more ›

Contrary to the expectation of most analysts, the US Federal Reserve will possibly refrain from raising its key interest rate in September. On Wednesday evening (19/08) the minutes of the Fed's latest FOMC meeting (held in July) were released and they showed that most officials agreed that the US economy is heading for an interest rate hike but is not quite there yet as inflation remains lower than targeted while the current sluggish global economy poses risks and triggers high volatility.

Read more ›

Indonesian stocks and the rupiah continued to weaken on Wednesday (19/08) in line with most other Asian stocks and currencies. Investors are cautious ahead of the release of the minutes of the Federal Reserve’s latest FOMC meeting, hence moving into safe haven assets. The minutes are to be released early Thursday morning local Indonesian time. Investors will be searching for signs informing about a possible Fed Fund Rate hike in September. If there are such signs, emerging market assets will be under heavy pressure tomorrow.

Read more ›

Just before the market closed on Tuesday (18/08) the Indonesian rupiah experienced a remarkable recovery, signalling that the country’s central bank (Bank Indonesia) intervened to support the ailing currency (after Malaysia’s ringgit, the rupiah is the second-worst performing emerging currency in Asia so far this year, weakening 11.2 percent against the US dollar). Today, based on the Bloomberg Dollar Index, the Indonesian rupiah was gradually falling toward IDR 13,860 per US dollar until it suddenly appreciated markedly.

Read more ›

For the sixth straight month, the central bank of Indonesia (Bank Indonesia) left its interest rate regime unchanged at Tuesday’s Board of Governor’s meeting (18/08) as it aims to guard the rupiah against severe volatility (which occurred after China’s yuan was allowed to devalue, while markets are still preparing for monetary tightening in the USA) and tries to combat inflation.

Read more ›

Although influence of the devaluation of China’s yuan has eased, the Indonesian rupiah remains under pressure as investors are waiting for results of Bank Indonesia’s Board of Governor’s meeting (to be held later today), low oil (and other commodity) prices, while the US dollar appreciates against most other currencies amid mixed US macroeconomic data. Based on the Bloomberg Dollar Index, the rupiah had depreciated 0.12 percent to IDR 13,838 per US dollar by 10:30 am local Jakarta time on Tuesday (18/08).

Read more ›

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.

Read more ›

For the third day in a row, Indonesia's main stock index (IHSG) made a strong upward jump on Friday (28/06). Supported by strong American and European stock indices on the previous trading day, the IHSG rose 3.06 percent to 4,818.90 points. American and European indices mostly rose on Thursday (27/06) due to various positive macroeconomic data from the USA. These economic data translated into the good performance of the IHSG and other Asian stock indices on Friday. All sectoral indices of the IHSG were reported to have grown.

Read more ›

Stock indices in the United States were up for the third day in a row on Thursday (27/06). Main reason for this upward trend are various positive macroeconomic figures from the USA. The number of homes under contract to be sold (excluding new construction) grew 6.7 percent in May, while analysts had forecast growth of about 1 percent from the previous month. Personal spending, which accounts for about 70 percent of the domestic economy, grew 0.3 percent in May, while personal income rose 0.5 percent.

Read more ›

Asian stock indices were up on Thursday (27/06) after economic growth of the United States in Q1-2013 was lower than expected. Paradoxically, this had a positive effect on global stock indices as speculation arose that the disappointing growth rate would convince the Federal Reserve to continue its quantitative easing program. It also had a good affect on Indonesia's main stock index (IHSG), which gained 1.92 percent and ended at 4,675.75. The index was well on its way to close a gap (at 4,743-4,801) but was blocked by mixed European openings.

Read more ›

The main stock index of Indonesia (IHSG) fell 0.24 percent to 4,418.87 on Tuesday (25/06) as foreign investors continued to sell parts of their Indonesian stock portfolios. In fact, after selling USD $68 million worth of stocks on Tuesday, foreign investors have now sold more stocks than they bought in 2013. From its record high of 5,214 on 20 May 2013, the IHSG has now fallen 15 percent. After the speech of Ben Bernanke one week ago (19/06), investors have been pulling out money from emerging markets, including Indonesia.

Read more ›

After several years of significant foreign capital inflows into Indonesia, a sharp contrast has been visible in recent weeks. Global panic that followed in the days after Ben Bernanke announced that the Federal Reserve intends to withdraw its quantitative easing program in 2014 (if economic recovery of the USA continues), hit Indonesia hard. It triggered a massive capital outflow from the country's stock exchange (IDX) as well as from government securities (Surat Berharga Negara, or SBN).

Read more ›

Similar to the Jakarta Great Sale event, Indonesia's main stock index (IHSG) trades its stocks at low prices as foreign investors have sold large parts of their Indonesian stock assets in recent weeks. Last week, foreign investors sold IDR 4.9 trillion (about USD $492.4 million), meaning that this year's accumulated foreign net buying has evaporated. Will these sales continue? Yes, I think so. Foreigners have invested about IDR 144 trillion in Indonesia's capital markets between 2007 and Q1-2013. As such, there is still plenty to sell.

Read more ›

On Friday's trading day (21/06), Indonesia's main stock index (IHSG) was still under the spell of the unrest that emerged because of Ben Bernanke's announcement of a possible stop to the Federal Reserve's quantitative easing program in 2014. Moreover, weak manufacturing data from China also continued to cause negative market sentiments. The IHSG fell 2.48 percent to 4,515.37, its lowest closing since 11 February 2013. Foreign investors sold about USD $228 million more stocks than they bought.

Read more ›

Concerns about an ending to the Federal Reserve's quantitative easing program and falling industrial activity in China as well as China's credit crisis made many investors decide to sell assets on stock markets around the world on Thursday (20/06). Indonesia's main stock index (IHSG) was just one of the many victims of this global unrest. The index weakened 3.68 percent to 4,629.99 points as foreign investors mostly sold their Indonesian assets, resulting in significant lowered share prices of Indonesia's big cap companies.

Read more ›

On Wednesday (19/06), Indonesia's main stock index (IHSG) posted a 0.70 percent fall to the level of 4,806.66 points as foreign investors continued to sell more Indonesian stocks than they bought. Moreover, the IHSG did not receive any support from the Asian region, where most stock indices weakened. Similar to Europe and the United States, Asian markets were eagerly waiting for results of the meeting of the Federal Reserve on Wednesday evening and thus mostly refrained from trading during the day.

Read more ›