On Monday (20/10), Indonesia raised IDR 21.2 trillion (about USD $1.8 billion) from the sale of rupiah-denominated retail bonds (Obligasi Negara Ritel Indonesia, abbreviated ORI). This is not only the country’s largest ORI-bond sale ever, but also the largest bond sale in 2014 so far. ORI, which is usually issued once per year, is a bond that is issued specifically to Indonesian retail investors/individuals. The ORI series ORI011 was offered in the period 1-16 October 2014 with a coupon rate of 8.5 percent and a tenor of three years.

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Indonesian stocks, bonds and the rupiah exchange rate performed well ahead of - and during - the inauguration of Joko Widodo (Jokowi) as Indonesia’s seventh President on Monday morning (20 October 2014). At 10:45 am local Jakarta time, when Jokowi was making his speech in front of the People's Consultative Assembly (MPR), the Jakarta Composite Index had surged 1.36 percent to 5,097.25 points, while the rupiah had appreciated 0.78 percent to IDR 12,015 per US dollar according to the Bloomberg Dollar Index.

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On 19 October 2014, 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 topics such as the performance of Indonesian stocks and the rupiah, foreign direct investments, an update on the coal mining sector, tax, the cement industry, palm oil, steel industry, and more.

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Indonesian stocks and the rupiah exchange rate strengthened considerably on Friday (17/10) due to speculation that president-elect Joko Widodo will raise prices of subsidized fuels soon after his inauguration as Indonesia’s seventh President on Monday 20 October 2014. Furthermore, a meeting between Widodo and powerful opposition leader Prabowo Subianto on Friday morning also managed to ease concerns about political stability in Southeast Asia’s largest economy. Lastly, rising indices on Wall Street added positive market sentiments.

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On 12 October 2014, 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 topics such an outlook for GDP growth, the benchmark interest rate, the equity market, car sales, the coffee industry, the Giant Sea Wall Jakarta, and more.

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Executive director of equity research at JP Morgan Securities Indonesia Aditya Srinath painted a positive picture about the equity market in Indonesia despite the lingering risks emerging from domestic political instability and looming capital outflows due to higher US interest rates in the second quarter of 2015. Srinath stated that Indonesia’s economic resilience so far as well as falling domestic interest rates among Indonesian financial institutions are positive signs for the equity market.

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Both the Indonesian rupiah exchange rate and Indonesian stocks weakened sharply on Wednesday (08/10) due to internal and external factors. Externally, weakening stock indices on Wall Street on Tuesday (07/10) have a severe negative impact on the performance of Asian stocks today. Wall Street was down on the IMF’s downward revised outlook for global GDP growth in 2014 and 2015, as well as on Germany’s industrial production, which fell the most in five years in August 2014.

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Although domestic car sales in Indonesia have again exceeded the psychological level of 100,000 vehicles per month, sales have fallen 12 percent year-on-year (y/y) to 101,801 units in September 2014. In September last year, car sales were heavily supported by the newly-introduced low cost green car (LCGC). Domestic car sales constitute an important indicator to measure consumer confidence and domestic consumption. Domestic consumption accounts for 55 percent of total economic growth in Indonesia.

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On 5 October 2014, 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 topics such September inflation, August trade balance, the IPO of Blue Bird, a rupiah and stock update, a new plantations bill, political developments, and more.

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The Indonesian rupiah exchange rate depreciated sharply on Monday (29/09) due to the market’s reaction against parliament’s passing of a bill that ends direct elections in the regions. On Friday (26/09), parliament agreed that mayors, district heads and governors will be elected by local legislatures instead of the people. Critics say this bill is a major setback for democracy and makes the system more vulnerable to corruption. Last Friday, investors had already pulled USD $119 million from Indonesian shares.

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On this week's second day of trading (01/10), the benchmark stock index of Indonesia (IHSG) was able to post a 0.69 percent rise to 4,345.90 points despite ongoing concerns about the economic shutdown in the United States as discussions have not led to agreement about the country's debt ceiling. However, various data from Asia made a good impact. Indonesia's trade surplus in August and deflation in September contributed to positive market sentiments and provided a boost for the rupiah.

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Concerns about the US debt ceiling issue have a negative impact on stock indices around the world, including Indonesia's benchmark stock index (IHSG). Market players fear a possible deadlock during the state budget discussions, which - if not resolved - will have a serious negative impact on the economy. Factors that contributed to negative market sentiments were the continued depreciating value of rupiah and weak openings of European stock indices. The IHSG fell 2.43 percent to 4,316.18 on Monday (30/09).

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Investors are eagerly waiting for the release of Indonesia's September inflation rate. Indonesia has been hit by high inflation since the government decided to increase prices of subsidized fuels at the end of June. High inflation limits its people's purchasing power and as domestic consumption accounts for about 55 percent of Indonesia's economic growth, it thus impacts negatively on GDP growth, particularly after Bank Indonesia raised its benchmark interest rate (BI rate) from 5.75 to 7.25 percent between June and September.

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Indonesia's benchmark stock index (IHSG) was up 0.40 percent to 4,423.72 on Friday (27/09). The gain was mainly carried by demand for a number of Indonesian blue chip stocks. Astra International rose 1.16 percent after Deutsche Securities Indonesia, Credit Suisse Securities Indonesia and Citigroup Securities Indonesia increased their stakes in one of Indonesia's largest diversified conglomerates. Other blue chips that performed well were Perusahaan Gas Negara, Bank Mandiri, Telekomunikasi Indonesia and Indofood Sukses Makmur.

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As had been hoped, after closing the gap at 4.375-4.403, Indonesia's benchmark stock index (IHSG) did not continue its fall at the same pace as it had in the past couple of days. Investors were still cautious, however, and took a wait and see attitude. Foreign investors were net sellers of Indonesian stocks, while the rupiah exchange rate kept depreciating. Moreover, Asian stock indices were mixed and thus provided no good support for the IHSG. The index fell 0.02 percent to 4,405.89. Domestic investors were net buyers of Indonesian stocks.

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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.

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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.

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On Thursday (19/09), most currencies and stock indices outside the USA were bullish after the Federal Reserve decided to continue its massive monthly USD $85 billion bond buying program. Today (20/09), Asian currencies and stock indices took the foot off the gas as many investors sought to cash in on yesterday's gains. The MSCI Asia Pacific was still able to rise slightly (0.1 percent) after jumping 2.2 percent yesterday, but Indonesia's benchmark stock index (IHSG) plunged 1.86 percent (after gaining 4.65 percent yesterday).

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Contrary to the expectation of most analysts, the Federal Reserve decided to continue its monthly USD $85 billion bond-buying program, known as quantitative easing, and retained the low interest rate of 0.25 percent. Although coming as a surprise, the news was well-received by the investor community all around the world, who were eager and confident to purchase stocks. The benchmark stock index of Indonesia, IHSG, felt this impact too and rose 4.65 percent to 4,670.73 points.

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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.

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