On Monday (02/06), Indonesian Internet services provider Link Net conducted its initial public offering (IPO) on the Indonesia Stock Exchange (IDX). Despite the negative market sentiments (brought on by the release of Indonesia's wide April 2014 trade deficit), the company's shares rose 50 percent on its trading debut. Offered at IDR 1,600 (USD $0.14) per share at the start of trading, the shares finished at IDR 2,600 (USD $0.28) on Monday. Ciptadana Securities was appointed as lead underwriter for the IPO.

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One day after the official announcement that two pairs will compete in the presidential election (9 July 2014), the benchmark stock index of Indonesia (Jakarta Composite Index or IHSG) and the Indonesian rupiah exchange rate are still in a state of decline. Although yesterday (19/05) the rupiah and IHSG strengthened considerably prior and shortly after Joko "Jokowi" Widodo declared that Jusuf Kalla would be his running mate (the vice-presidential candidate) in the election, markets have been selling Indonesian assets since Monday afternoon.

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Both the Indonesian rupiah exchange rate and the country's benchmark stock index (known as the Jakarta Composite Index or IHSG) have strengthened significantly on Wednesday's trading day (14/05). The rupiah appreciated 0.76 percent to IDR 11,450 per US dollar by 15:00 local Jakarta time according to the Bloomberg Dollar Index. Meanwhile, the IHSG gained 1.09 percent to 4,975.13 by the same time. Main reason for this strong performance is the official declaration of the PDI-P to form a coalition with NasDem and PKB.

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Indonesian Internet services provider Link Net decided to set its share price for the company's initial public offering (IPO) at IDR 1,600 (USD $0.14), the upper level of the indicative price as investor demand is expected to be high. The company, a subsidiary of First Media (cable-TV operator and Internet services provider), offers 304 million shares, or 10 percent of its enlarged capital between 22 and 23 May 2014. The listing on the Indonesia Stock Exchange is planned for 2 June 2014. Lead underwriter is Ciptadana Securities.

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Chitose Internasional, an Indonesian furniture manufacturer intends to release 30 percent of its enlarged capital through an initial public offering (IPO) on the Indonesia Stock Exchange in June 2014. Currently, the company is trying to obtain approval from the Financial Services Authority (OJK) in order to conduct the IPO. President Director of Chitose Internasional Dedie Suherlan said that the proceeds will be used for the construction of a new factory, which will produce wood-based furniture products. This factory should become operational in 2015.

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Indonesia’s Financial Services Authority (OJK) announced that it is studying the requests of seven Indonesian companies to conduct an initial public offering (IPO) on the Indonesia Stock Exchange in the first semester (January-June) of 2014. If the OJK grants permission to these requests, it means that 17 companies will have conducted an IPO on the Indonesia Stock Exchange (IDX) in the first half of 2014. In total, 30 new company listings are expected on the IDX in 2014.

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The Indonesia Stock Exchange (IDX) is optimistic that its target of a total of 30 new initial public offerings (IPOs) in 2014 will be achieved as the 2014 elections are expected to bring positive market sentiments. Companies and investors are confident that a stronger and more balanced government will be inaugurated in October 2014; one that will foster higher economic growth. Moreover, previous election years have always shown that Indonesia's stock market gets a positive boost amid these elections.

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PT Dwi Aneka Jaya Kemasindo Tbk, an Indonesian-based company specialized in corrugated carton and offset printing, offers one billion new shares (40 percent of its enlarged capital) - at a price range of between IDR 425 and IDR 475 per share - in its initial public offering (IPO) on the Indonesia Stock Exchange in the weeks ahead. The printing and packaging company aims to raise a total of between IDR 425 billion (USD $37.3 million) and IDR 475 billion (USD $41.5 million) through this corporate action.

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Investors were not happy to see the parliamentary election result of Indonesia on Wednesday (09/04). The fragmented outcome implies continued political uncertainty toward the July 2014 presidential election. None of the Indonesian political parties were able to secure a majority in the legislative election, meaning it will be more difficult to pursue a clear and steady political course over the next five years. The PDI-P, which was forecast to secure an impressive victory on the 'Jokowi effect', was unable to record a large victory.

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On Tuesday (08/04), Wijaya Karya Beton (Wika Beton) was officially listed on the Indonesia Stock Exchange (IDX) with listed company code WTON. Wika Beton, a subsidiary of majority state-owned construction company Wijaya Karya, specializes in the precast concrete industry of Indonesia. The company issued two billion shares, or 23.47 percent of its enlarged capital, and expects to raise up to IDR 1.28 trillion (USD $113 million), which will be used for business expansion and for additional working capital.

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Similar to the Indonesian government, Indonesia's central bank also announced a fiscal policy package to support sustainable nationwide economic growth by curbing inflation, maintaining a more sustainable balance of payments as well as strengthening financial system stability. These additional policies are expected to synergise with the policy package unveiled by the government on Friday (23/08). These measures were taken as both the rupiah and Indonesia's main stock index (IHSG) are in a downward spiral.

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The rebound that happened in the first session of Friday's trading day (23/08) gave hope that Indonesia's main stock index (IHSG) would end the disastrous week on a positive note. However, in the second session of the day market participants began selling Indonesian assets causing the index to fall again, although the fall was limited. In line with the Asian region, the index lost 0.04 percent to end at 4,169.83 points. Even the highly anticipated 'rescue package' of the Indonesian government was not able to support the index.

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Today's release of the economic rescue package was not able to put Indonesia's main stock index (IHSG) into green territory. Also, the Indonesian rupiah maintained its losing streak. The IHSG fell 0.04 percent to 4,169.83 points. Interestingly enough, the IHSG was rising previous to the release of the package. After the release, however, it started to weaken slightly, which seems to indicate that market participants were a bit disappointed with the contents of the package as it contained no quick fixes to the economy.

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As had been announced previously, today (23/08) the government of Indonesia released an 'emergency plan' that aims to improve the financial sector while restoring confidence in the country's fundamentals as turmoil emerged on Indonesia's stock exchange, bonds market and the rupiah. Economic minister Hatta Rajasa said that this plan consists of four packages. These four packages cover the current account deficit, rupiah performance, economic growth, purchasing power, inflation and investments.

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On Thursday (22/08), Indonesia's main stock index (IHSG) was not able to continue the rebound that occurred yesterday when the country's biggest pension fund, Jamsostek, began buying blue-chip stocks in a move to support the ailing index. Indonesia's benchmark index has now lost about 20 percent since its record peak in May 2013. Today, it fell 1.11 percent to 4,171.41 points. Eight sectoral indices weakened, of which the top losers were construction (-5.78 percent), basic industry (-3.42 percent), and finance (-2.39 percent).

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On Tuesday (20/08), Indonesia's benchmark stock index (IHSG) continued its decline with its fourth consecutive day of losses. Amid major concerns about Indonesia's economic growth, high inflation, tighter monetary policy and current account deficit, the IHSG fell 3.21 percent to 4,174.98 points. It means that the index now stands about 21 percent lower than its record peak in May 2013. Foreign investors have been pulling money out of the Indonesian market. According to Bloomberg, about USD $255 million has been retracted in the last two days.

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Analysts expect that Indonesia's benchmark stock index (IHSG) will end mixed today (20/08) after yesterday's large plunge amid heavy market concerns. Yesterday, the index dropped 5.58 percent to 4,313.52 points, the lowest since October 2011. Indonesia posted a current account deficit in the second quarter of 2013, while Thailand entered into a recession. The MSCI Emerging Market index¹, which includes both countries, fell 1.4 percent to a six-week low. Below a short overview of factors that caused negative sentiments on Indonesia's market.

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For several weeks now, Indonesia's main stock index (IHSG) has been experiencing a sharp correction. As I wrote in my previous columns, market participants have been waiting for several important macro economic data, to wit Indonesia's economic growth figure for the second quarter of 2013, the July 2013 inflation rate, and the country's trade balance statistics for the first six months of this year. Now all above results have been released, we can analyze further the impact of these macroeconomic results as well as investors' reaction to it.

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After two days of growth, Indonesia's main stock index (IHSG) became victim of profit taking on Thursday (15/08). Particularly domestic investors were eager to sell their Indonesian assets. Falling indices on Wall Street on Wednesday (14/08) in combination with global uncertainty about the end of the Federal Reserve's quantitative easing program made a negative impact on Asian stock indices, including the IHSG. Indonesia's central bank's decision to keep its benchmark interest rate at 6.50% was well-received by most investors.

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After Wall Street turned back into the green zone on Tuesday (13/08) and was accompanied by continued rising stock indices in Europe, it provided good support for Asian stock indices on Wednesday (14/08), including Indonesia's main stock index (IHSG). Indonesian mining commodities and plantation stocks fell but these losses were offset by rising big cap stocks (particularly finance stocks) and speculation that Indonesia's central bank will keep its benchmark interest rate (BI rate) at 6.50 percent.

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