On Tuesday (24/03), Indonesian hospital operator Mitra Keluarga Karyasehat became the second company to list on the Indonesia Stock Exchange (IDX) in 2015. It turned out to be a highly successful initial public offering (IPO) as the company’s shares surged 24.7 percent on its trading debut, reflecting investors’ solid confidence in healthcare stocks. Mitra Keluarga, subsidiary of pharmaceutical company Kalbe Farma, raised IDR 4.4 trillion (USD $341 million), hence constituting the largest IPO since Garuda Indonesia’s IPO in 2011.

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Saham di Indonesia dan nilai tukar rupiah menguat tajam pada hari Kamis (19/03) setelah Federal Reserve menunda menaikkan suku bunga acuannya dalam Pertemuan Federal Open Market Committee (FOMC) selama dua hari yang berakhir pada hari Rabu (18/03) karena inflasi Amerika Serikat (AS) masih rendah sedangkan pertumbuhan ekonomi AS sedikit melambat. Bank sentral AS menberikan sinyal bahwa Fed tidak terburu-buru untuk menaikkan suku bunga acuannya. Di sisi lain, Fed juga menghapuskan kata 'sabar' dari panduannya untuk suku bunga (yang berada dalam posisi paling rendah sejak akhir 2008).

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While most Southeast Asian stock markets and emerging Asian currencies strengthened on Tuesday (03/03) on the back of a rebounding yen and - contrary to expectation - the decision of the Reserve Bank of Australia (RBA) to leave its cash rate a record low of 2.25 percent, Indonesian stocks and the rupiah performed rather flat. The benchmark Jakarta Composite Index fell 0.06 percent to 5,474.62 points, while the Indonesian rupiah rate appreciated 0.01 percent to IDR 12,969 according to the Bloomberg Dollar Index.

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The benchmark stock index of Indonesia (Jakarta Composite Index) edged higher on Monday (23/02) to set another all-time record high supported by foreign investors’ net buying (IDR 708.2 billion), optimism that Greece will not default on its debt or exit from the Eurozone, and on gaining Southeast Asian stock markets (while markets in China were still closed due to Chinese New Year). Meanwhile, the Indonesian rupiah exchange rate depreciated 0.09 percent to IDR 12,836 per US dollar according to the Bloomberg Dollar Index.

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On 22 February 2015, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic matters such as the latest trade data, an analysis of Bank Indonesia’s decision to cut its key interest rate, the performance of Indonesian stocks, news about the mineral ore export ban, and more.

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The benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated JCI or IHSG) posted a series of consecutive record high closes during the past week, primarily on the central bank’s (Bank Indonesia) decision to cut its key interest rate (BI rate) by 25 basis points to 7.50 percent, investors’ positive outlook on Indonesian companies’ corporate earnings in 2015 and expectation that the Eurozone’s quantitative easing program will offset the negative impact of monetary tightening in the USA.

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One day after the surprise interest rate cut by Indonesia’s central bank, Indonesian stocks surge to a new record level led by interest rate sensitive stocks (such as financial institutions, construction firms and property firms) while the rupiah and government bonds are weakening. Yesterday (17/02), Bank Indonesia shocked markets by lowering its key interest rate (BI rate) and deposit facility rate (Fasbi) by 25 basis points, each, to 7.50 percent and 5.50 percent, respectively. Easing monetary policy is back in fashion among the region’s central banks.

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HM Sampoerna, Indonesia's largest tobacco producer by market capitalization (controlling about 23 percent of the Indonesian tobacco market), plans to increase its free-float shares by 5.68 percent (valued at USD $1.27 billion) in order to meet the minimum free float requirement of 7.5 percent set by the Indonesia Stock Exchange (IDX) in a regulation introduced in January 2014 and which will come into effect on 30 January 2016. By this date all listed companies on the IDX must have a minimum free float of 7.5 percent.

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Five listed Indonesian companies have been added to the Pefindo25 Index, an index compiled by Indonesian credit rating agency Pefindo (Pemeringkat Efek Indonesia). Companies that are eligible to join the Pefindo25 Index are small and medium enterprises (SMEs) - listed on the Indonesia Stock Exchange (IDX) - that contain good fundamental performance and liquidity. The Pefindo25 Index consists of a total of 25 Indonesian companies and is reviewed and revised twice per year.

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Indonesian stocks and rupiah exchange rate weakened significantly at the start of the new week amid profit taking and political uncertainties in the Eurozone as Greece’s anti austerity party Syriza posts a clear victory in the country’s legislative election (although failing to obtain an absolute majority). The benchmark stock index of Indonesia fell 1.90 percent in the first trading session on Monday (26/01), while the rupiah had depreciated 0.60 percent to IDR 12,534 per US dollar at noon (Bloomberg Dollar Index).

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The Indonesia Stock Exchange (IHSG) experienced a mixed week. At the start of the week, the index rose, but towards the end of the week it weakened, although ending in the green on Friday. Recently, the IHSG has hit record levels, and this makes market participants worried that the index might fall in case there emerge negative market sentiments. These concerns are what made the index turn away from the next psychological boundary: 5,000 points.

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On Thursday 4 April 2013, market players were hoping that the Indonesia Stock Exchange (IHSG) would climb beyond the psychological level of 5,000. However, the presence of negative market sentiments - and the overbought condition of the IHSG - were used as reasons to engage in profit taking. It consequently pushed down Indonesia's main financial market indicator to the level of 4,922.61, an 1.18 percent fall compared to Wednesday's trading day.

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Despite positive results of monthly US Factory Orders and Economic Optimism, it did not support Asian stock markets up to the end of Wednesday's trading day. The Indonesia Stock Exchange (IHSG), on the other hand, maintained its upward movement to reach 4,981.47, a 0.49 percent gain. Matters that supported the IHSG's performance to yet another new record high level, were well-received 2012 company reports as well as expected dividend payouts.

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Usually, news about inflation is not well-received by market participants. Particularly when inflation turns out to be higher than expected. This time, however, something interesting happened in Indonesia. Although the country's March inflation rate was high (5.90 percent year-on-year), it was not followed up by a negative response of market players. In fact, the inflation rate seems to have strengthened the Indonesia Stock Exchange (IHSG), which gained 0.40 percent on Tuesday.

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With a number of important global stock exchanges still closed due to Easter, it seemed that the Indonesia Stock Exchange (IHSG) lacked a reference point to which it could cling. It is also likely that market participants have already consumed most of the 2012 corporate company reports and are therefore not waiting for new data of listed companies. Moreover, today's announcement of the relative high inflation rate of March did not support the IHSG either.

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This column is the first in a series of columns about investing in Indonesia, in particular about investing in its capital markets. These columns are written by David Sutyanto, research analyst at First Asia Capital, and - as this column is the starting point - he will provide a short and broad outline of the Indonesian capital markets for now. Later, his columns will contain topics that delve more deeply into the capital markets, such as listed companies, and much more.

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Not only the upward movement of most Asian stock markets, but also a number of positive company reports (regarding corporate performances of 2012) supported the Indonesia Stock Exchange (IHSG) to reach a new record-high level of 4,928.10 on Wednesday, implying an 1.77% increase compared to the previous trading day. Moreover, American and European stock markets had ended higher on Tuesday due to positive data, thus discarding turmoil related to Cyprus.

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After speculation began to spread that an agreement would be reached between Cyprus and Troika (made up of the European Union, the European Central Bank and the IMF), Asian stock markets went up, including the Indonesia Stock Exchange (IHSG). Despite foreigners' appetite for selling Indonesian assets, the index rose as it was lifted by domestic market participants' appetite for purchasing those stocks that experienced a fall on the previous trading day.

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The rise of the Indonesia Stock Exchange (IHSG) at the start of today's session was not sustained. It disappointed market participants who were hoping that Indonesia's main index would continue its upward movement supported by strengthening American and European stock indices after it became known that Cyprus will stay in the Euro-zone and the Federal Reserve will continue its bond-buying program.

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Despite global concerns, the bailout issue in Cyprus did not push Asian stock markets - including the Indonesia Stock Exchange (IHSG) - further in a downward spiral. From today's rebound of Asian stock indices we can conclude that market participants were optimistic after the meeting of the Cyprus parliament. Previously, panic emerged as imposition of fees to depositors was announced, although it is still planning only and not in effect yet.

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