Indonesia’s decision to raise import tariffs for food, cars, clothes as well as various other consumer goods put additional downward pressure on Indonesian stocks on the last trading day of the week (24/07). Those listed companies (retailers) that rely on imported goods saw their shares tumble as a consequence of the higher import tariffs. The Indonesian Finance Ministry raised import duties for consumer goods between 10 and 150 percent (depending on product) in a bid to boost the country’s consumer goods industry and curtail imports.

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It is expected to be another difficult day for Indonesian stocks and the rupiah as there are few to none positive market sentiments that can support these assets on today’s trading day. Wall Street closed lower on Thursday (23/07) for the third consecutive day on disappointing financial results of several big companies, dragging down indices in the East. Commodity indices continue to fall (oil returning to bear market on resilient US output and rising OPEC supply). Meanwhile, sharp rupiah depreciation makes investors nervous.

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Stock trading at the Indonesia Stock Exchange (IDX) restarted on Wednesday (22/07) after the four-day Idul Fitri holiday ended. Shortly after opening on Wednesday, Indonesia’s benchmark Jakarta Composite Index (IHSG) rose 0.50 percent on investors’ optimism about the recent good performance of global stock markets after debt-ridden Greece reached an agreement with its international creditors while turmoil in Chinese stocks faded. Not long after opening, however, Indonesian shares were dragged down by other Asian indices.

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On Tuesday (14/07), construction firm and property developer Binakarya Jaya Abadi became the 11th company to list on the Indonesia Stock Exchange (IDX) in 2015. The company offered 150 million shares, 25 percent of its paid up capital, in an initial public offering (IPO) at an offering price of IDR 1,000 per share, thereby raising IDR 150 billion (USD $11.3 million). Despite weak market sentiments, the company’s shares rose 50 percent on its trading debut on the IDX. RHB OSK Securities was underwriter for the IPO.

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In line with the global trend, Indonesian stocks extended their gains on Tuesday morning (14/07). Most stock indices (across the globe) continue to move in green territory after debt-ridden Greece and its international creditors agreed - after a 17-hour long emergency meeting - to an austerity package that will keep Greece within the Eurozone. Indonesia’s benchmark Jakarta Composite Index (IHSG) had risen 0.60 percent to 4,923.36 points by 11:45 am local Jakarta time on Tuesday.

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Indonesian information technology solutions provider Anabatic Technologies, became the 10th company to list on the Indonesia Stock Exchange (IDX) in 2015. By selling 375 million shares, or 20 percent of the company’s enlarged capital, Anabatic Technologies raised IDR 262.5 billion (USD $19.5 million). In the initial public offering (IPO) 10 percent of the company’s shares were bought by Japanese IT solutions provider TIS. Through this partnership, Anabatic expects to expand its business outside Indonesia.

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Indonesian stocks and the rupiah weakened further on Wednesday (08/07) due to the continuing fall of Chinese stocks (raising concerns about global economic growth) and the downward revision of the World Bank and Asian Development Bank (ADB)’s economic growth forecasts for Indonesia in 2015. Furthermore, global uncertainty brought about by the looming Greek exit (Grexit) from the euro continues to plague markets worldwide and makes investors prefer to wait for more certain times.

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Agus Martowardojo, Governor of Indonesia’s central bank (Bank Indonesia), predicts that the current economic turmoil in the Eurozone, caused by the Greek debt crisis, will impact on the stability of developing countries, including Indonesia. Although in terms of both trade and investment there should not be a real impact originating from Greek turmoil, the perception of macroeconomic stability will be somewhat hit on the back of global uncertainty. In line with most markets, Indonesian stocks and the rupiah weakened on Monday (06/07).

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As expected Indonesian stocks as well as the rupiah weakened after the opening of trade on Monday morning (06/07). This performance is in line with the direction of other markets in Asia. The primary reason behind this performance is the result of Greece’s referendum, conducted on Sunday (05/07), in which Greek voters overwhelmingly rejected reform plans that are demanded by the country’s international creditors. This result seriously jeopardizes the future of Greece in the Eurozone.

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Although Indonesia is considered as one of the Asian economies that is particularly vulnerable to a Greek exit from the euro (‘Grexit’), Indonesian stocks and the rupiah did not decline as heavily as other emerging market assets on Monday’s trading day (29/06), the first trading day after the collapse of talks between debt-ridden Greece and its international creditors. Indonesia’s benchmark Jakarta Composite Index fell 0.82 percent to 4,882.59 points while the rupiah depreciated 0.24 percent to IDR 13,339 per US dollar (Bloomberg Dollar Index).

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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.

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Indonesia's benchmark stock index (IHSG) rebounded on Tuesday (03/09) amid rising Asian stock indices inflicted by optimism about economic recovery in China and the USA. The IHSG rose 1.53 percent to 4,164.12 points. Agribusiness and mining stocks were the top performers today, while the miscellaneous industry, which fell 0.09 percent, was the only sectoral index on the Indonesia Stock Exchange (IDX) that was down. The rupiah depreciated against the US dollar as investors are concerned about July's USD $2.3 billion current account deficit.

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Indonesia's benchmark stock index (IHSG) went down 2.23 percent on Monday (02/09) after Statistics Indonesia (BPS) released a number of macroeconomic data. The country's inflation pace increased to 8.79 percent year-on-year, while it posted a record monthly trade deficit in July 2013 (USD $2.31 billion). Investors have been highly concerned about the development of Indonesia's current account deficit and after it became known that the figure was high in July, the IHSG quickly lost value.

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Last week Friday (30/08), Indonesia's benchmark stock index (IHSG) ended 2.23 percent up to the level of 4,195.09 points, continuing its three-day 'winning streak'. Underlying reasons being the central bank's new policy package (that was released as a response towards the negative impact of global turmoil on Indonesia's financial stability) and the higher benchmark interest rate (BI rate). The BI rate was raised 50 basis points on Thursday (29/08) to 7.0 percent to stabilize the weakening rupiah that fell to IDR 11,000 per US dollar.

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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.

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For the second day in a row Indonesia's benchmark stock index (IHSG) was able to post a gain. Today, it rose 1.92 percent to 4,103.59 points. This rebound is possibly the result of the higher key interest rate. Yesterday, it was announced that the central bank (Bank Indonesia) scheduled an extra meeting to discuss monetary policy. Immediately speculation emerged that the BI rate might be raised by 50 basis points. And indeed it was raised, much to the liking of many investors and analysts.

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Although Indonesia is one of the victims of the reversal of investment flows from emerging markets to developed markets, it is still far from a crisis. Global uncertainty regarding the possible ending of the Federal Reserve's monthly USD $85 billion bond-buying program (QE3) and, to a lesser extent, the possible invasion of the US in Syria have worried investors and resulted in the withdrawal of funds from emerging markets. Funds are flowing back to western developed countries that have recently been showing signs of continued economic recovery.

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Most of us who were hoping for a limited weakening of Indonesia's benchmark stock index (IHSG) today (27/08) were to be disappointed. Instead of a limited decline, the IHSG fell 3.71 percent to 3,967.84 points. Market participants are concerned about both the global and domestic economy, thus pulling money out from Indonesia. The weakening rupiah and weak stock index openings in Europe (due to tensions in Syria) pushed the IHSG further down into red territory. Foreign investors were again net sellers of Indonesian assets.

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After market participants had time in the weekend to think over the 'rescue packages' of the Indonesian government and central bank (Bank Indonesia) that were released on Friday (23/08), they seemed unconvinced about the short-term impact of the packages. As a result, Indonesia's main stock index (IHSG) fell 1.18 percent to 4,120.67 points on Monday (26/08), which is the IHSG's lowest level since 7 September 2012. The Indonesian rupiah gained 0.06 percent to IDR 10,841 (Bank Indonesia's mid rate).

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Despite the announcement of an economic policy package aimed at overcoming the impact of global financial turmoil, Indonesia's main stock index (IHSG) was not able to end the week on a positive note, while the value of the rupiah on the spot market depreciated 1.68 percent to IDR 11,058 per US dollar on Friday (23/08) amid a majority of strengthening Asian currencies, including the Indian rupee (0.67 percent) and the Thai baht (0.28 percent). Based on Bank Indonesia's mid rate, the rupiah fell 4.4 percent against the US dollar to IDR 10,848 last week.

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