The Indonesia Stock Exchange (IDX) will increase the minimum ratio of shares that need to be listed on the IDX by a listed company. Through Regulatory No. I-A regarding the Listing of Shares & Equity Securities other than Shares Issued by Listed Companies (Peraturan Nomor I-A tentang Pencatatan Saham dan Efek Bersifat Ekuitas yang Diterbutkan oleh Perusahaan Tercatat), the minimum ratio of publicly issued shares is 7.5% of a company's total enlarged capital. If companies will not comply, they may face de-listing from the IDX.

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On Sunday 5 January 2014, Indonesia Investments released its latest 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 during the last seven days on our website. Most of the topics involve economic matters such as an update on Indonesia's inflation and current account deficit, initial public offerings (IPOs) in 2014, car sales, the Financial Services Authority (OJK) and Indonesia's aviation industry.

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Same as last year's result, the Indonesia Stock Exchange expects 30 Indonesian companies to conduct an initial public offering (IPO) in 2014. Ito Warsito, Director of the Indonesia Stock Exchange (IDX), said that 15 companies are targeted to become listed on the exchange in the first half of 2014. In January 2014, Link Net, Bank Panin Syariah, Bank Ina Perdana as well as Asuransi Mitra Maparya are expected to become listed companies as they have already been granted approval for this corporate action.

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The central bank of the United States, the Federal Reserve (FED), announced that it will start winding down its quantitative easing program in January 2014. Currently, the Fed purchases USD $85 billion worth of bonds per month but this amount will be reduced to USD $75 billion next month. The Fed came to this decision as prospects of the US labor market have shown a marked improvement, while economic growth is expected to accelerate to between 2.8 and 3.2 percent in 2014 and between 3.0 to 3.4 percent in 2015.

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On Wednesday (18/12), PT Industri Jamu dan Farmasi Sido Muncul, better known as Sido Muncul Herbal, was the 30th company that became listed on the Indonesia Stock Exchange (IDX) in 2013. The company, Indonesia's largest herbal medicine producer, offers 1.5 billion shares (about ten percent of its enlarged capital) to the public for the price of IDR 580 per share, thus aiming to generate IDR 8.7 trillion (USD $72.5 million) from today's initial public offering (IPO).

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Various analysts believe that the benchmark stock index of Indonesia (the Jakarta Composite Index or IHSG) can make a good jump in 2014 to the level of between 5,000 to 5,300 points (from 4,182 currently) despite the looming end of the Federal Reserve's quantitative easing program (QE3) which may result in temporary capital outflow from Indonesia's capital markets. The analysts believe that positive internal developments will provide solid support for the IHSG. These developments include the trade balance, rupiah exchange rate and general elections.

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Sawit Sumbermas Sarana (SSMS), a palm oil plantation company that conducted its initial public offering (IPO) on the Indonesia Stock Exchange on Thursday (12/12), aims for a 15 percent growth (yoy) in net profit in 2014 to IDR 207 billion (USD $17.3 million) as the price of crude palm oil (CPO) is expected to improve. The company's listing on the stock exchange (IDX) was a success, rising almost 12 percent on its debut, supported by foreign enthusiasm. Foreign institutional investors bought 81 percent of the stocks that were issued.

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In Bank Indonesia's Board of Governors' meeting - held on Thursday (12/12) - it was decided to keep the country's benchmark interest rate (BI rate) at 7.50 percent. Executive Director of Bank Indonesia's Communication Department Difi A. Johansyah said that the current rate of 7.50 percent is in line with the institution's inflation target of 4.5 percent (plus or minus one percent). The lending facility and deposite facility (Fasbi) rates are also maintained at 7.5 percent and 5.75 percent respectively.

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Yesterday (10/12), the 28th initial public listing (IPO) in 2013 on Indonesia's Stock Exchange was conducted. Financing company Indomobil Multi Jasa - with company code IMJS - offered 450 million shares, or 10.4 percent of its stake, to the public with a price tag of IDR 500 per share. The company is a subsidiary of Indomobil Sukses Internasional (IMAS), Indonesia's second-largest automotive distributor after Astra International. Through the IPO, the company aims to obtain IDR 225 billion for business expansion.

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The Indonesian rupiah exchange rate maintained its downward trend on Wednesday (27/11). Bank Indonesia's mid rate depreciated 0.41 percent to IDR 11,813 per US dollar. Investors remain concerned about Indonesia's wide current account deficit. Today, Finance Minister Chatib Basri said that the current account deficit will be around USD $30 billion by the end of 2013, significantly up from USD $24 billion at the end of 2012. In the third quarter of 2013, the current account deficit was USD $8.4 billion (3.8 percent of Indonesia's GDP).

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Although the Indonesia Stock Exchange (IHSG) was moving in the red zone for a while during today's trading day, in the end it recorded a small gain. Most other Asian stock indices, except for Hong Kong's Hang Seng and Shanghai, went up as well. High expectations about continued IHSG-growth, strong corporate results of companies, and continued robust foreign demand for Indonesian stocks pushed the index up.

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A surge in plantation, consumer, infrastructure and financial stocks has pushed the Indonesia Stock Exchange (IHSG) higher up the path of record-breaking highs on Friday, despite mixed Asian stock markets and a weak opening of European stock indices. Moreover, continued reports about good corporate results of listed companies convinced market participants to engage in trading, despite an already overbought market.

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Rising Asian stock markets, particularly a strong Hang Seng (Hong Kong) that opened today after the Chinese new year celebrations, had a positive impact on the Indonesia Stock Exchange (IHSG). As had happened in previous years, the IHSG has the tendency to gain ahead of Valentine's day. Today, market participants received their special Valentine's gift: a new record-high IHSG level of 4601.95, although in the end it had to close a bit lower.

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The upward movement of American and European stock indices yesterday, brought on due to positive internal sentiments in both regions, provided good support for Asian stock markets today. Apart from foreign influences, Asian stock markets were also supported by company reports that showed good corporate results in 2012. As such, the Indonesia Stock Exchange (IHSG) also joined the green wave of Asian stock markets, and set a new record high.

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It seems that the Indonesia Stock Exchange (IHSG) was blessed by the Chinese new year celebrations as it closed higher on Monday than on the previous trading day. This is a better performance than usual on the days around the new year. If we take a look at the period 2008-2012, the IHSG declined three times on the day before new year, and twice on the day after. This year, the IHSG declined on the day before by -0.26% and increased by 0.27 on the day after.

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After rallying for three days to try to end on a new resistance level, the Indonesia Stock Exchange (IHSG) finally had to retreat. As we suspected, the index weakened after its record high. Moreover, American and European indices were weak on Thursday, thus influencing the performance of the IHSG on Friday. Lastly, a number of Asian companies reported weak corporate reports that subsequently impacted on Asian stock indices, including the IHSG.

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After experiencing various sentiments as well as profit taking, the Indonesia Stock Exchange (IHSG) eventually ended higher today than it had closed on Friday. During the trading day, however, it looked like it would end negatively for a while. Mixed Asian stock indices and fears of decline after the IHSG had reached record highs, made the index vulnerable. But due to strong purchases by foreigners and the impact of the positive openings of European stock indices, the IHSG booked a small gain.

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