With only one more day to go before the General Elections Commission (KPU) will release the official result of the July 2014 presidential election, it seems almost certain that it will take a Constitutional Court ruling for the final judgement. Over the weekend, data from KPU indicates that Joko Widodo has won the election by a margin of about five percentage points. However, his rival Prabowo Subianto has already stated that he will challenge the result as he claims that there are indications of fraud at several polling stations.

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Indonesian president Susilo Bambang Yudhoyono, who will end his second and final five-year term in October 2014, announced to meet both presidential candidates (Prabowo Subianto and Joko Widodo) in the country’s State Palace on Sunday (20/07). In this meeting, president Yudhoyono will emphasize the importance of a peaceful and orderly transition to the next government. Currently, it remains unknown who of the two candidates won the presidential election (held on 9 July 2014). Due to the tight race, chances of social unrest increase.

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Global real estate services firm Jones Lang LaSalle expects condominium sales in Indonesia to post a record-breaking figure in 2014, particularly supported by the current trend in Jakarta (Indonesia’s capital city) where people continue to shift to apartment living instead of detached or attached single-unit housing. Anton Sitorus, head of research at Jones Lang LaSalle, said that despite the weaker outlook for Indonesia’s property market, both developers and buyers have shown increased interest in developing and buying property.

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Although investors in Indonesian stocks received positive news from the USA after Federal Reserve Head Janet Yellen stated on Tuesday (15/07) that the US economic recovery remains incomplete therefore justifying the continuation of a loose monetary policy for the foreseeable future as well as solid economic expansion of 7.5 percent (yoy) in China during the second quarter of 2014, the domestic political context in Southeast Asia’s largest economy remains a concern. What are the latest political developments in Indonesia?

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The US dollar continues to depreciate against emerging currencies after the minutes of the Federal Reserve’s latest FOMC meeting, released Wednesday (09/07), suggest that the US central bank will maintain historic low interest rates (0.0 - 0.25 percent) into 2015. The Fed informed that US interest rates hikes will only occur ”a considerable time” after the US asset-buying program (quantitative easing) has ended. Based on the latest minutes, this program is expected to end in October 2014.

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Although not all quick count scores indicate a Joko Widodo (Jokowi) win, Indonesia’s stock and financial markets have gained considerably on Thursday (10/07) - one day after the 2014 Indonesian presidential election - on speculation that the General Elections Commission (KPU) will declare Jokowi the winner of the election on 22 July 2014. Out a total of 12 quick counts (mentioned below), eight showed a Jokowi win. Importantly, these seven quick counts include the authoritative agencies that traditionally have been highly accurate.

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Since 07:00 am local time, Indonesians have been able to cast their votes for the country’s presidential election; a tight race between Joko Widodo and Prabowo Subianto. Despite the narrow gap between both presidential candidates (based on various surveys), the election has been conducted in good order so far. The polling stations will close at 13:00 pm local time. Hereafter, live quick count scores, which are traditionally quite accurate, will be presented. By approximately 17:00 pm local time, the quick counts are expected to be finalized.

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Today, the Indonesian people decide who will become the next president of the world’s largest archipelago for the period 2014-2019. The Indonesian electorate numbers about 185.6 million (out a total population of 250 million) and they have only two options to choose from: Joko Widodo (Jokowi) and Prabowo Subianto, which also implies that the election will only require one round. Voting starts at 07:00 am local time and the ballot boxes close at 13:00 pm local time. Indonesian financial markets are closed.

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Wednesday 9 July 2014, is a big day for Indonesia as on that day the Indonesian people will vote for the successor of incumbent Indonesian President Susilo Bambang Yudhoyono who had been given the mandate to lead two five-year presidential terms between 2004 and 2014 (and who is the only president in the era of Reformasi that was re-elected by the people). Now, the people have to choose between Joko Widodo (Jokowi), joined by running mate Jusuf Kalla, and Prabowo Subianto, who is joined by running mate Hatta Rajasa.

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After having seen his lead over rival Prabowo Subianto narrow considerably in recent months, the latest survey released by the Indonesia Survey Circle (LSI) today (07/07) indicates that presidential candidate Joko ‘Jokowi’ Widodo’s popularity has rebounded, although the race remains tight. According to the survey, Jokowi and running mate Jusuf Kalla secured 47.8 percent of respondents’ votes, slightly higher than their rivals Prabowo Subianto and running mate Hatta Rajasa at 44.2 percent.

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The Indonesia Investment Coordinating Board (BKPM) announced that growth of foreign direct investment (FDI) in Indonesia has slowed in the first nine months of 2014. In the first three quarters Indonesia saw the influx of IDR 228.3 trillion (USD $18.7 billion) worth of FDI, a 14.6 percentage point increase year-on-year (y/y). However, this growth pace is much lower than the 21.3 percent point growth of FDIs in the first nine months of 2013. In US dollar terms the decline was even greater as the rupiah has been depreciating.

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Indonesian stocks and the rupiah have rebounded on Friday due to several internal and external factors. During the first trading session on Friday (17/10), the benchmark stock index of Indonesia (Jakarta Composite Index, or IHSG) surged 0.94 percent to 4,998.14 points. Meanwhile, based on the Bloomberg Dollar Index, the Indonesian rupiah exchange rate had appreciated 0.26 percent to IDR 12,228 per US dollar by 12:30 pm local Jakarta time. Why do Indonesian stocks and the rupiah perform well on Friday?

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Domestic steel sales in Indonesia are expected to rise 6 percent y/y to 15.1 million tons in 2014. Meanwhile, the global average steel price has been USD $536 per ton this year, implying that the market value of Indonesian steel sales is to reach USD $8 billion this year. In recent years, the country’s steel sales have been rising on development of infrastructure, defense industry, and manufacturing. The sales are expected to continue rising in the years ahead due to commitment of the government to boost infrastructure development.

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Global credit rating agency Moody’s Investors Service stated that it maintains a stable outlook for Indonesia’s sovereign and corporate debt rating in the next quarters due to the country’s healthy credit fundamentals, solid macroeconomy, and reduced political tensions. Moody’s believes that Indonesia’s fundamentals are strong enough to offset the negative impact of external pressures such as looming higher US interest rates and slowing economic growth in China. Moody’s had raised Indonesia’s sovereign debt rating to investment grade in late 2011.

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Indonesian Finance Minister Chatib Basri said that the lower pace of economic growth in China, the world’s second-largest economy, is a major concern for Indonesia as it leads to declining demand for commodities (and thus places downward pressure on commodity prices). As Indonesia is a major commodity exporter - such as coal, crude palm oil, nickel ore and tin - the country feels the impact of weak global demand for commodities. About 60 percent of Indonesia’s exports are commodities, mostly raw ones.

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Today, Indonesian president-elect Joko Widodo (commonly referred to as Jokowi) and Facebook CEO Mark Zuckerberg met in Jakarta to discuss how Facebook can be utilized for the benefit of the people and how the social media network can support Indonesian micro businesses. With nearly 70 million, Indonesia contains the world’s fourth-largest Facebook community. With a total population that numbers about 250 million people, a burgeoning middle class and relatively low Internet penetration, there remains a large untapped potential.

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Indonesian stocks tumbled at the first trading day of the week as investors are still concerned about the condition of the global economy. Declining stock indices on Wall Street at the end of last week had a negative impact on Asian stock indices, including Indonesia’s benchmark stock index (known as the Jakarta Composite Index, or abbreviated IHSG). The IHSG fell 1.01 percent to 4,913.05, its lowest level since 4 July 2014, on Monday (13/10). Foreign investors recorded net selling of IDR 595 billion (USD $49.6 million).

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Bank Indonesia Governor Agus Martowardojo said that although the recent weakening trend of the Indonesian rupiah exchange rate is in line with the performance of other Asian currencies, the central bank is prepared to intervene in the market in an effort to support the currency and keep it in a comfortable range. On Monday (06/10), Bank Indonesia Executive Director Tirta Segara already stated that foreign exchange intervention was conducted in September 2014 in order to stabilize the rupiah exchange rate.

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Technically the benchmark stock index of Indonesia (Jakarta Composite Index, or IHSG) had to rebound after sharp declines during the last couple of trading days making Indonesian stocks relatively cheap. The IHSG was also supported by rising stock indices in Japan and Hong Kong that rose on strong US jobs data (although other Asian markets fell due to concerns about sooner-than-expected US interest rate hikes. Meanwhile, the rupiah continued to depreciate as the market is concerned about the political situation in Indonesia.

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Indonesian stocks plunged considerably on Thursday (02/10). The country’s benchmark stock index (Jakarta Composite Index, abbreviated IHSG) declined 2.73 percent to 5,000.81 points, the largest drop in almost six months. This poor performance was caused by both external and internal factors. Externally, various weak economic data from the USA and Europe as well as an appreciating yen impacted negatively on Asian stock indices. Internally, market participants responded negatively toward the inauguration of the new parliament.

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