While most Asian stock indices were in the red zone on Friday (02/12), Indonesian stocks bucked the trend. Indonesia's benchmark Jakarta Composite Index rose 0.91 percent to 5,245.96 points, while the Indonesian rupiah appreciated 0.39 percent to IDR 13,512 per US dollar (Bloomberg Dollar Index). While global investors were cautious ahead of the new US payroll data (to be released later on Friday), domestic investors poured money into Indonesian stocks. What explains this performance today?

Read more ›

Indonesia's manufacturing sector continued to contract in November 2016 (the second straight month of contraction), albeit at a slower pace. Indonesia's Nikkei Manufacturing Purchasing Managers' Index (PMI) climbed to a reading of 49.7 points last month from 48.7 points in October 2016 (a reading above 50.0 signals expansion of the manufacturing sector, while a reading below 50.0 indicates contraction). Contraction in November was largely blamed on subdued demand and floods in parts of Indonesia.

Read more ›

Indonesian stocks and the rupiah are under pressure on Thursday (24/11). Amid rising expectation of a Fed Funds Rate hike before the year-end, the US dollar rose to a 13 year-high implying all emerging market currencies are sliding. The Indonesian rupiah, one of the more vulnerable emerging market currencies, had depreciated 0.39 percent to IDR 13,542 per US dollar by 10:20 am local Jakarta time. Meanwhile, the benchmark Jakarta Composite Index had fallen 0.85 percent to 5,167.87 points by the same time.

Read more ›

There is plenty of news that is impacting on Asia's financial markets this morning: a big earthquake (as well as tsunami alert) occurred in Japan's Fukushima, the crude oil price surged to a three-week high, US stocks touched record high levels overnight, while Indonesian authorities officially banned another "anti-Ahok protest" rally. Most Asian stocks are rising on Tuesday morning (22/11) although Indonesia's benchmark Jakarta Composite Index started in the red. However, the index quickly entered green territory some time later. Meanwhile, the rupiah remains under pressure. Lets take a closer look.

Read more ›

Indonesian stocks continued to decline on Tuesday (15/11), for the third consecutive day. After a promising start - Indonesia's Jakarta Composite Index (IHSG) rose about 1 percent in today's first trading session - the index finished the day down 0.73 percent to 5,078.50 points. Key matters that cause this selloff are the US dollar approaching a 14-year high as well as expectation of rising inflation in the USA now Donald Trump has been elected next US president. This cocktail gives rise to capital outflows from emerging markets to the USA.

Read more ›

Donald Trump becoming US president causes investors to re-evaluate emerging market assets, and Indonesia is among the biggest victims. Trump is eager to make the USA "great again", partly by using the protectionist approach. Considering Trump may be supported by the Republican-controlled US Congress, investors see a real chance for realization of Trump's plans (which include infrastructure development, tax cuts, as well as the exiting of free trade and environment deals). This has a big impact on emerging markets.

Read more ›

Emerging markets in Asia, including Indonesia, are plagued by sharply depreciating currencies on Friday morning (11/11). Demand for the US dollar is high on the "Trump effect". With a Republican-controlled US Congress and pragmatic businessman Donald Trump in the White House, markets have become positive about US economic growth in the years ahead. Meanwhile, it feeds the likelihood of faster and more frequent Fed Funds rate hikes during Trump's administration. The Indonesian rupiah was down 5.53 percent to IDR 13,865 per US dollar by 09:18 am local Jakarta time (Bloomberg Dollar Index).

Read more ›

Not only were we surprised by Donald Trump's victory in the US presidential election, but also by markets' positive reaction to Trump's win on Tuesday. It shows that most analysts' opinions and opinion polls fail to reflect reality accurately (similar to the Brexit case earlier this year). Today (10/11) the turnaround continued in Asia, extending the performance of European and US stocks overnight. Indonesia's benchmark Jakarta Composite Index opened 0.79 percent higher on Thursday morning (10/11), while the rupiah has not really moved yet.

Read more ›

Donald Trump will soon become the 45th president of the United States, the world's largest economy. In the election on Tuesday (08/11) he defeated market favorite Hillary Clinton, being the first to obtain more than 270 (state-by-state) electoral votes. The world was stunned and therefore heavy movements occurred in global financial markets (that previously had priced in a Clinton win). Reportedly, Clinton has already conceded to Trump through a telephone call.

Read more ›

Today - Tuesday 8 November 2016 - is an important day for the United States, and perhaps even more important for the rest of the world. Around 140 million American voters are expected to show up to vote for the 45th president in today's US presidential election. The US presidential race, a tough battle between Hillary Clinton (Democrats) and Donald Trump (Republicans), has a major impact on financial markets across the globe. In this column we discuss and follow the latest developments regarding the US presidential election on Indonesian stocks and rupiah.

Read more ›

ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the October 2013 edition, a number of important issues that are monitored include Indonesia's inflation rate, the trade balance, the current account deficit, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt:

Read more ›

Indonesian car sales have already exceeded the one million mark in October 2013. In the January-October period, 1,018,786 car units were sold, a ten percent increase compared to car sales in the same period last year. Growing demand for cars in Indonesia indicates that this sector of Southeast Asia's largest economy is not influenced by current negative market sentiments, such as the sharply depreciated Indonesian rupiah exchange rate (against the US dollar), high inflation (8.32 percent yoy in October 2013), and slowing economic growth.

Read more ›

Contrary to most Asian indices, Indonesia's Jakarta Composite Index (IHSG) managed to post a gain on Thursday (07/11). The IHSG seemed to follow the upward movement of Wall Street on the previous day (06/11) after a number of Federal Reserve officials stated to support the continuation of the Fed's monthly USD $85 billion bond-buying program (quantitative easing). Despite continued foreign net selling, the IHSG index rose 0.82 percent to 4,486.11 points as domestic purchases offset foreign selling.

Read more ›

Indonesia will most likely not meet its original GDP growth target of 6.3 percent (stipulated in the 2013 State Budget). Yesterday (06/11), it was announced by Statistics Indonesia that Indonesia’s GDP growth figure in the third quarter of 2013 was recorded at 5.62 percent (year-on-year, yoy), the weakest quarterly growth figure since 2009 when the global financial crisis impacted on Southeast Asia’s largest economy. In 2013, Indonesia feels the global impact again, in combination with domestic factors.

Read more ›

After the one-day holiday due to the Islamic new year, Indonesia's benchmark stock index (Jakarta Composite Index or IHSG) started in the red on Wednesday (06/11) amid the continued depreciation of the rupiah exchange rate against the US dollar and the mixed performance of Asian stock indices (influenced by weakening global indices on the previous day). However, during the day a number of stocks, which had fallen previously, became popular investment targets, which supported the index.

Read more ›

On Monday (04/11), Indonesia's benchmark stock index (IHSG) fell 0.21 percent to 4,423.29 points. Besides the negative influence of falling indices across Asia and foreign net selling of Indonesian stocks, the IHSG was also dragged down by the continued depreciation of the Indonesian rupiah exchange rate (against the US dollar). When US manufacturing data showed that manufacturing activity grew faster than expected in October, the US dollar gained and thus the rupiah became pressured.

Read more ›

Indonesia's October inflation rate was well-received by investors. On Friday (01/11), Statistics Indonesia (BPS) announced that the country's inflation in October 2013 grew 0.09 percent. Easing inflation was mainly due to falling prices of raw foods and clothes. Year-on-year (yoy), however, Indonesia's inflation is still high at 8.32 percent, although showing a moderating trend from 8.40 percent (yoy) in September 2013 and 8.79 percent (yoy) in August 2013. Inflation had skyrocketed after subsidized fuel prices were raised by an average 33 percent in June.

Read more ›

The Jakarta Composite Index (Indonesia's benchmark stock index) fell 1.73 percent on Friday (01/11) to 4,432.58 points. A persistent concern for investors is the tapering issue of the Federal Reserve's quantitative easing program. Analysts expect the program to continue at a pace of USD $85 billion per month until at least March 2014, but investors remain concerned. Another issue that brought negative market sentiments was September's trade figure, which was released today. In September, Indonesia recorded a trade deficit of USD $657.2 million.

Read more ›

Despite foreign investors recording a net buy on the Jakarta Composite Index on Thursday (31/10), a depreciating rupiah as well as falling stock indices across Asia made investors concerned. Thus, the benchmark index of Indonesia followed the pace of other Asian indices and ended on 4,510.63 points (a 1.40 percent fall). The outcome of the Federal Reserve's FOMC meeting did not support the rupiah. On the contrary, the rupiah fell after the Fed stated to continue quantitative easing but that the tapering may start sooner than expected.

Read more ›

In line with falling Asian indices, Indonesia's benchmark stock index (the Jakarta Composite Index or IHSG) was down on Tuesday (29/10). Investors are cautious ahead of the Federal Reserve meeting and thus used today to engage in profit taking. The IHSG fell 0.60 percent to 4,562.77 points. Moreover, the appreciating trend of the rupiah exchange rate was disturbed ahead of the Fed meeting and which also formed a contributing factor for the fall of the IHSG today. Foreign investors recorded a net sell, while domestic investors recorded a net buy.

Read more ›