Update COVID-19 in Indonesia: 2,956 confirmed infections, 240 deaths (8 April 2020)
8 April 2020 (closed)
USD/IDR (16,245) -165.00 -1.01%
EUR/IDR (17,659) -75.16 -0.42%
Jakarta Composite Index (4,626.69) -151.94 -3.18%
The performance of Indonesia’s benchmark stock index (known as Jakarta Composite Index or IHSG) was similar to the performance at the start of last week, possibly influenced by the presidential debates that took place a day prior to the past two Mondays. These debates, between the two presidential candidates (Joko Widodo and Prabowo Subianto), are broadcast live on national television and are important to outline each candidate’s vision and mission to the people. On 9 July 2014, Indonesians will vote for a new leader.
Something interesting occurred on today’s trading day (23/06). Shares of telecommunication company Indosat surged after Joko Widodo had stated in Sunday’s debate that he would like to see the government to buy back shares of the company, provided they can be purchased at a fair price. Shares of Indosat were sold to a Singaporean company during the Megawati Sukarnoputri administration (2001-2004) as a direct result of the Asian financial crisis in 1997-1998, when the government needed financial resources. Apparently, there is a clause in the sale agreement that allows the Indonesian government to buy back the company’s shares. However, to us it seems highly exaggerated that the stock of Indosat should perform like this due to Widodo’s statement. After all, there is no sign that shares of Indosat will be bought back anytime soon.
Asian stock indices were mixed and this influenced investors’ appetite for Indonesian stocks on Monday (23/06), particularly as the rupiah exchange rate continued to depreciate as well as a weak domestic bonds market. Indonesia’s Jakarta Composite Index fell 0.11 percent to 4,842.13 points on Monday.
Fears of tightening liquidity in China due to soaring property prices as well as the Beige Book survey which indicated a slowdown in the pace of investments in the world’s second largest economy, has weakened Chinese stocks and impacted negatively on other Asian stock indices (despite the fact that the HSBC manufacturing PMI index was positive).