Despite Slowing Economic Growth Indonesia's IHSG Gains 0.60%
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.
In fact, today's release of Indonesia's Q3-2013 GDP growth did not seem to influence the movement of the IHSG. Statistics Indonesia announced today that the economy of Indonesia expanded by 5.62 percent in the third quarter of 2013, implying the fifth consecutive quarter of slowing economic growth.
The index gained 0.60 percent to 4,449.76 points on Wednesday (06/11).
| Source: Bank Indonesia
Today, the US ISM Non Manufacturing and Redbook, which both posted positive growth, were the main factors of the continued decline of the Indonesian rupiah against the US dollar. Positive economic data in the USA are also a cause for intensified speculation that the Federal Reserve's tapering will start soon. The slowing economic growth rate of Indonesia, which was released today, did not have a major impact on the rupiah as it had already been assumed that the growth rate would fall slightly. The depreciation of the rupiah was limited, however, as foreign banks in Indonesia showed increased appetite for Indonesian bonds.
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