20 January 2022 (closed)
Jakarta Composite Index (6,626.87) +34.86 +0.53%
USD/IDR (14,146) -6.00 -0.04%
EUR/IDR (17,335) +57.05 +0.33%
Indonesia's benchmark Jakarta Composite Index climbed 0.01 percent to 4,451.59 points on Wednesday (11/11) despite foreign investors recording a net sell of IDR 614.4 billion (approx. USD $45.5 million). Uncertainty persists in the global economy as more macroeconomic data from China signal weaknesses in the world's second-largest economy. Growth in output from China's factories declined to a six-month low in October (missing expectations), following earlier disappointing trade and inflation data. On the other hand, it triggers hope that Beijing will step up stimulus measures.
On a positive note, China's retail sales expanded at the fastest pace since December 2014. Still, economic turmoil in the country - China is growing at the slowest pace in a quarter of a century - continues to plague global markets despite the central bank of China already having cut its key interest rate six times (within a 12-month period), while reducing the amount of cash banks are required to keep as reserves. Chinese authorities have been adjusting the country's growth model from export and (state) investment-oriented to domestic consumption-oriented.
Jakarta Composite Index (IHSG):
The Indonesia Stock Exchange suspended three brokerages - Danareksa Sekuritas, Reliance Securities and Millenium Danatam Sekuritas - on Wednesday due to suspected fictitious trading (Danareksa Sekuritas, a state-controlled company, is the oldest and one of the largest brokerages in Indonesia). It remains unknown when these brokers are allowed to resume trading. Meanwhile, seven other brokerages are under investigation for (allegedly) manipulating the share price of listed coal miner Sekawan Intipratama. The stock exchange suspended trading in shares of Sekawan Intipratama on 9 November after the miner's shares had lost 64 percent of its value in two weeks.
The Indonesian rupiah appreciated 0.14 percent to IDR 13,600 per US dollar (Bloomberg Dollar Index), extending its 'winning streak' to two days, as the US dollar took a breather after appreciating late last week and at the start of this week after US non-farm payrolls surged sharply, triggering expectations that the US central bank will raise its key interest rate by 25 basis points in December.
The rupiah was also supported by a strong debt auction on Tuesday when the Indonesian Finance Ministry sold IDR 9 trillion worth of bonds, above the indicative target of IDR 6 trillion, with total incoming bids at IDR 13.68 trillion.
The rupiah was also supported by a statement from Agus Martowardojo, Governor of Indonesia's central bank, saying the lender of last resort will continue to focus on the country's economic stability. This statement implies that the country's benchmark BI rate will be kept at 7.50 percent despite easing inflation.
Most emerging currencies in Asia appreciated against the US dollar today, but gains were limited due to concern about China's slowdown.
Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.32 percent to IDR 13,576 per US dollar on Wednesday (11/11).
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia