Up to Wednesday (15/05/13), 69 Indonesian companies have announced to pay out dividends for the financial year 2012 to their shareholders, totaling a combined amount of IDR 64.1 trillion (USD 6.57 billion). This amount is equivalent to 41 percent of 2012's net profit of the 69 companies. In the weeks ahead, it is expected that more companies will announce dividend payouts. In 2012, more than one hundred listed companies on the Indonesia Stock Exchange (IDX) paid out dividends (of a total number of 462 listed companies at end 2012).

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Electronic City Indonesia (ECI), a leading electronics retailer in Indonesia, plans to conduct an initial public offering (IPO) on the Indonesia Stock Exchange (IDX) in June 2013. According to the company's website, Electronic City is Indonesia's first modern electronic convenience store, specialized in selling electronic products for Indonesia's middle class and elite. Through the IPO, the company hopes to raise about USD $150 million which will be used for capital expenditure.

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Indonesian newspaper Investor Daily reported that stocks at the Indonesia Stock Exchange are still relatively cheap compared to regional stock indices. Currently, the price to earnings ratio (P/E ratio) of Indonesia's main index is about 18. In contrast, South Korea's Kospi index amounts to 34, Japan's Nikkei 28, Taiwan's Taiex 23, and Philippines' PSE stands at 23 times earnings. As the Indonesian economy as well as its companies' profit figures are projected to grow, the P/E is expected to fall to 16 this year.

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Wijaya Karya Beton (Wika Beton), a company that specializes in the precast concrete industry, is planning to conduct an initial public offering (IPO) on the Indonesia Stock Exchange this year. The company, which has appointed Mandiri Sekuritas as its underwriter, aims to raise about IDR 1 trillion (USD $103 million) through the IPO. Originally, its IPO was planned to be conducted in 2014. However, the company prefers to take advantage of current positive market sentiments.

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PT Semen Baturaja Tbk, a state-owned cement producer, will offer 20 to 35 percent of its equity to the public when it conducts its initial public offering (IPO) on the Indonesia Stock Exchange in June or July 2013. Initially, the Indonesian cement company was planning to conduct the IPO in 2012 but disagreement within the House of Representatives (DPR) - the government institution that needs to approve the IPO - resulted in a temporary postponement.

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In the period April-June 2013, at least 13 Indonesian companies are planning to pay the final dividends for book year 2012. It is expected that this number will rise in the weeks ahead as there are still companies that need to hold the annual general meeting (AGM), in which dividend payouts are decided. Last year, more than one hundred listed companies on the Indonesia Stock Exchange paid out dividends (of a total number of 462 listed companies at end 2012).

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In Indonesian media it was reported today that the Blue Bird Group, Indonesia's largest taxi services group, picked Credit Suisse AG and UBS AG as underwriters for its initial public offering (IPO), which is assumed to take place in the second or third quarter of this year (initially the IPO was planned for the first half of 2013). Through this IPO, in which 20 to 40 percent of its equity will be sold to the public, the taxi company targets to collect about US $250 million.

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Garuda Indonesia (GIAA), one of Indonesia's biggest airlines, posted a 100 percent increase in net profit to US $145.4 million in 2012 from US $72.7 million a year earlier. Operating profit of the company rose 82 percent to US $110.8 million from US $64.2 million in 2011. These numbers were supported by a 19.6 percent increase in passengers from 17.1 million in 2011 to 20.4 million last year, while its seat load factor rose to 75.9 percent from a previous 75.2 percent.

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Director of Corporate Valuation of the Indonesia Stock Exchange (IHSG), Hoesen, said that the stock exchange expects 150 companies to conduct an initial public offering (IPO) on the IHSG within the next five years. In other words, an average of 30 newly-listed companies per year. Also, the amount of domestic investors in Indonesia is expected to increase to become one percent (of the 240 million-numbering population).

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Yesterday, Trans Power Marine made a solid debut on the Indonesia Stock Exchange (IHSG). The Indonesian shipping company listed 15 percent of its shares in the initial public offering (IPO) for the price of IDR 230 per share. At the end of the trading day, its shares had surged by 50 percent to IDR 345 (US $0.04). In total, the company gained IDR 90.85 billion (US $9.4 million) through the IPO. These funds will be used to buy new vessels.

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Rising global stock indices at the end of last week continued to impact positively on Asian stock indices on Monday (21/10), including Indonesia's Jakarta Composite Index (IHSG). Moreover, speculation that the Federal Reserve will not alter its quantitative easing program until early next year also brought along positive market sentiments. This is expected to result in the inflow of US dollars into emerging markets. On Monday, the IHSG rose 0.70 percent to 4,578.18 despite continued foreign selling and rupiah depreciation.

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The Jakarta Composite Index (IHSG), the benchmark stock index of Indonesia, gained 0.61 percent and ended on 4,546.57 on Friday (18/10). Stock trade showed a consolidating trend with the value of transactions in the regular market amounting to IDR 4.39 trillion (USD $388.5 million). Considering the full trading week, the IHSG gained 0.60 percent with an average daily transaction value of IDR 4.18 trillion. This value is below the previous week's average of IDR 4,36 trillion.

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The Jakarta Composite Index (IHSG) rebounded on Thursday's trading day (17/10), supported by good news from the United States where finally an agreement was reached regarding the US debt ceiling. This agreement brought positive market sentiments on Asian stock markets, including the IHSG which rose 0.59% to 4,518.93 points. Moreover, Indonesia's minister of Economy Hatta Rajasa stated that Indonesia had not been significantly impacted by the US shutdown issue and this statement also managed to ease investors' concerns.

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The benchmark stock index of Indonesia (IHSG) was down 0.61 percent to 4,492.26 on its first trading day after the Idul Adha celebrations (when Muslims remember that Abraham was willing to sacrifice his son to God). The main reason why the IHSG was down on Wednesday (16/10) was due to continued uncertainty about the US debt ceiling issue, while the deadline (17/10) is closing in. Fitch Ratings put US Treasury bonds on Rating Watch Negative, which might be a first step before a downgrade.

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Although Indonesia's benchmark stock index (IHSG) started mixed on Wednesday (09/10), it gradually climbed as the trading day moved on. The country's benchmark interest rate (BI rate), which was kept at 7.25 percent by Bank Indonesia on Tuesday (08/10), continued to make a positive impact. However, negative market sentiments were brought on by the US shutdown as well as the downgrade of the IMF's outlook for world economic growth in 2013 and 2014. Lastly, the weakening IDR rupiah also implied negative market sentiments.

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Although part of the market players on Indonesia's Stock Exchange (IDX) engaged in profit taking after Indonesia's benchmark index (IHSG) climbed for two consecutive days, the index still posted growth of 0.71 percent to 4,418.64 points on Thursday (03/10). Factors that contributed to today's gain were the depreciating US dollar as no solution has been found yet concerning the shutdown, generally rising Asian stock indices and the positive message that is conveyed in the APEC meeting in Bali.

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Despite some appetite for profit taking, the key stock index of Indonesia (IHSG) was able to rise 0.96 percent to 4,387.60 points on Wednesday (02/10). The index was supported by the appreciating rupiah, a few rising Asian stock indices and foreign net stock purchases. The Indonesian rupiah rose against the US dollar as the latter was impacted upon by the debt ceiling and shutdown issue in the USA. Asian stock indices were mixed. Concerns about the shutdown were offset by rising Asian currencies against the US dollar.

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It seems clear now how market conditions will be until the end of the year. Two important foreign issues - the US Federal Reserve's tapering of quantitative easing (QE3) as well as the US debt ceiling issue which resulted in a shutdown as the Democrats and Republicans failed to come to an agreement on the country's federal budget - and various economic data from Indonesia (inflation and the trade balance) have provided some more insight into the matter. I will discuss each topic one by one below.

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On this week's second day of trading (01/10), the benchmark stock index of Indonesia (IHSG) was able to post a 0.69 percent rise to 4,345.90 points despite ongoing concerns about the economic shutdown in the United States as discussions have not led to agreement about the country's debt ceiling. However, various data from Asia made a good impact. Indonesia's trade surplus in August and deflation in September contributed to positive market sentiments and provided a boost for the rupiah.

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Concerns about the US debt ceiling issue have a negative impact on stock indices around the world, including Indonesia's benchmark stock index (IHSG). Market players fear a possible deadlock during the state budget discussions, which - if not resolved - will have a serious negative impact on the economy. Factors that contributed to negative market sentiments were the continued depreciating value of rupiah and weak openings of European stock indices. The IHSG fell 2.43 percent to 4,316.18 on Monday (30/09).

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