The Indonesia Stock Exchange (IDX) is optimistic that its target of a total of 30 new initial public offerings (IPOs) in 2014 will be achieved as the 2014 elections are expected to bring positive market sentiments. Companies and investors are confident that a stronger and more balanced government will be inaugurated in October 2014; one that will foster higher economic growth. Moreover, previous election years have always shown that Indonesia's stock market gets a positive boost amid these elections.

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Investors were not happy to see the parliamentary election result of Indonesia on Wednesday (09/04). The fragmented outcome implies continued political uncertainty toward the July 2014 presidential election. None of the Indonesian political parties were able to secure a majority in the legislative election, meaning it will be more difficult to pursue a clear and steady political course over the next five years. The PDI-P, which was forecast to secure an impressive victory on the 'Jokowi effect', was unable to record a large victory.

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No Indonesian political party managed to secure a majority in the legislative election that was held on Wednesday (09/04). Based on various quick counts (that have proved to be reliable in previous elections), the election was won by the PDI-P (19 percent), followed by Golkar (15 percent) and Gerindra (12 percent). This outcome implies that political parties will need to form coalitions in order to be able to nominate a presidential candidate for Indonesia's presidential election that is scheduled for 9 July 2014.

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According to a survey from the Center for Strategic and International Studies (CSIS), 45.8 percent of the Indonesian electorate have still not decided which party or which presidential candidate to back in the legislative election (9 April 2014) and presidential election (9 July 2014). About 42.4 percent of the electorate knows who they will vote for, while 11.8 percent could not answer. These indications are based on a survey that involved interviews with 1,200 people in 33 provinces between 7-17 March 2014 (with a 2.83 percent margin of error).

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The latest survey of research institute Charta Politika Indonesia indicates that only three Indonesian political parties can rely on enough popular support to win the legislative election that will be held on 9 April 2014. These three parties are PDI Perjuangan (PDI-P), Golkar and Gerindra. Other parties will not have a chance to win the election based on the survey that was conducted in March 2014. Results of the March survey confirmed that these three parties' popularity grew markedly from the institute's December 2013 survey.

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Last week, global business magazine Fortune released the latest version of its world's 50 greatest leaders ranking. Fortune's annual ranking is based on a person's possession of rare leadership skills, admirability as well as having an influential role in society. The list was topped by Pope Francis who is considered to have attracted legions of non-Catholic admirers through the setting of a new direction. There was also one Indonesian leader included in the list. Governor of Jakarta Joko Widodo (popularly known as Jokowi) was ranked at number 37.

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At the end of last week, Jakarta Governor Joko Widodo (better known as Jokowi) inaugurated the Kota Tua revitalization program in North Jakarta. Kota Tua (Old Batavia) is the oldest part of Jakarta, spanning 1.3 square kilometres, and used to be the center of Dutch colonial rule in the 17th and 18th century (in the 19th century the Dutch moved its administrative center to the south). Today, Kota Tua still breathes a colonial atmosphere through the old architecture and museums, attracting tourists on a daily basis.

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On 16 March 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 matters such as the impact of Joko Widodo's run for presidency on financial markets, an analysis of Indonesia's current account deficit, an updated overview of the coal mining sector, Bank Indonesia's BI rate policy, and more.

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On 2 March 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 matters such as the G20 meeting in Sydney, foreign investment, Inflation, rupiah exchange rate performance, economic growth, ANTV's IPO, natural disasters, the presidential election, and more.

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After two days of demonstrations by tens of thousands of Indonesian workers, the Governor of Jakarta (Joko Widodo) raised the capital's minimum wage to IDR 2.4 million (USD $213) per month. The new minimum wage, proposed by the Jakarta Wage Council, will be implemented in 2014 and constitutes a 10% increase from the current minimum wage of IDR 2.2 million. The workers, however, had demanded for a minimum wage of IDR 3.7 million causing various institutions and analysts to express concerns about the impact on the investment climate.

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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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Senior economist at the Institute for Development of Economics and Finance (INDEF), Didier Damanhuri, believes that Indonesia’s two presidential candidates - Joko Widodo (popularly known as Jokowi) and Prabowo Subianto - are both similar in economic approach as both men are primarily focused on high gross domestic product (GDP) growth as the measurement for economic development, while, in fact, many countries that only focus on GDP growth show a high degree of economic inequality.

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Sunday evening (15/06), the second debate between Indonesia’s two presidential candidates - Prabowo Subianto and Joko ‘Jokowi’ Widodo - was held. This debate was broadcast live on various Indonesian television stations and - once again - managed to become a trending topic on social media. The debate, the theme of which was ‘development of the economy and social welfare‘, was characterized by a nationalistic and protectionist tone. This tone had already been set by Subianto in the past weeks but now Jokowi also stressed protectionism.

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As the market already expected that Indonesia’s benchmark interest rate (BI rate) would be kept at 7.50 percent in June 2014, the Indonesian rupiah exchange rate did not undergo any significant fluctuations on Friday’s trading day. Based on the Bloomberg Dollar Index, the currency had depreciated 0.05 percent to IDR 11,796 per US dollar by 16:25pm local Jakarta time. The US dollar had to cope with some pressures due to US retail sales (rising only +0.3 percent in May 2014) and weaker US jobless claims data.

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Just as unexpected as yesterday when the benchmark stock index of Indonesia (known as Jakarta Composite Index or IHSG) fell 1.06 percent amid positive domestic and international circumstances, the IHSG made a surprise rebound on Tuesday’s trading day. Yesterday’s fall was exorbitant and unfounded and today market participants made up for that performance by accumulating stocks that had lost value. As a result the IHSG gained 1.25 percent to 4,946.09 points on Tuesday (10/06).

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Contrary to most Asian stock indices which were positively influenced by Japan’s higher economic growth as well as rising indices on Wall Street last Friday (06/06), the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) fell considerably on Monday (09/06). Not even the appreciating Indonesian rupiah exchange rate could push the index back into the green zone. At the end of Monday’s trading day, the Jakarta Composite Index declined 1.06 percent to 4,885.08 points.

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On the last trading day of the week, the benchmark stock index of Indonesia (known as the Jakarta Composite Index of IHSG) rose 0.06 percent to the level of 4,973.06 points. Trading volume was low as investors are still carefully monitoring political and economic developments in Indonesia. Earlier in the week, political uncertainty increased when the country's second-largest political party (Golkar) decided to join the coalition that supports the Prabowo Subianto and Hatta Rajasa pair in the July presidential election.

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It had been speculated for a while, but yesterday the official declaration of Indonesia's presidential candidates and their running mates (the vice-presidential candidates) were presented. In the upcoming election, scheduled for 9 July 2014, Jakarta Governor Joko 'Jokowi' Widodo will face Prabowo Subianto, former army general and former son-in-law to president Suharto (Indonesia's second president), in a battle for the country's presidential seat. What is there to tell about this battle?

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After a promising start of the day, the rupiah exchange rate and Indonesian stocks lost all of their earlier gains ahead of closing on Monday day (19/05). Around 10:00 local Jakarta time, the rupiah rate appreciated more than 0.60 percent to IDR 11,346 per US dollar on speculation that Jusuf Kalla would be nominated as Joko "Jokowi" Widodo's running mate in the presidential election (9 July 2014), backed by a coalition consisting of the PDI-P, NasDem, PKB and Hanura. After the official declaration, however, the currency lost all of its earlier gains.

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The week ended well for both the Indonesian rupiah exchange rate and the benchmark Jakarta Composite Index (IHSG). Based on the Bloomberg Dollar Index, the rupiah appreciated 0.30 percent to IDR 11,413 per US dollar at the end of Friday's trading day (16/05). Meanwhile, the IHSG surged 0.80 percent to finish just above the psychological level of 5,000 points. The good performance was supported by investors' positive response towards the latest political developments in Indonesia.

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