Emerging markets, such as Indonesia, have been feeling the impact of a recovering economy in the United States. Last month, the Federal Reserve announced that, if the economy of the USA continues its improving trend, it will end its quantitative easing program gradually in 2013 until a complete stop in 2014. As Indonesia is one of the emerging economies that benefited from the spillover effects of the Fed's monthly bond-buying program, the country now feels the negative impact of the possible stop to the program.

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Today, three Indonesian companies will be listed on the Indonesia Stock Exchange (IDX). These companies are Victoria Investama (VICO), Multipolar Technology (MLPT), and Bank Mestika Dharma (BBMD). This year so far, 21 Indonesian companies have conducted their initial public offering (IPO). Eight others are still planning to conduct one in 2013. Indonesia's stock exchange has seen large capital outflows in the last month due to international concerns about a stop to the US quantitative easing program.

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After the World Bank signaled slowing economic growth in Indonesia, American multinational financial services corporation Morgan Stanley also detects problems in Southeast Asia's largest economy. According to Jonathan Garner, chief Asia and emerging-market strategist for Morgan Stanley, Indonesia’s stock market is the most vulnerable stock market in Southeast Asia in terms of sudden capital outflows. Morgan Stanley downgraded Indonesia's equities to underweight from equal weight and labeled the country as "a relatively over-owned country".

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The central bank of Indonesia (Bank Indonesia) decided today to raise its benchmark interest rate by 25 basis points to 6.0 percent. The decision was made amid concerns about the inflationary impact of a hike in subsidized fuel prices (planned this June) as well as increasing uncertainty in global financial markets as central banks' may scale back stimulus programs. The Indonesian rupiah has weakened considerably in 2013 and forms the worst performer in Asia after the Japanese yen among the 11 most-traded currencies tracked by Bloomberg.

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Sri Rejeki Isman (Sritex), an integrated textile manufacturer, is offering 5.6 billion new shares (equivalent to 30 percent of its total stock equity) to the public through an initial public offering (IPO) on the Indonesia Stock Exchange (IDX). The company expects to reap about IDR 1.34 trillion (USD $136.7 million) in new funds through this IPO. The offering period is from 10 to 12 June 2013 and its listing debut is scheduled for Monday 17 June 2013. Underwriter for the IPO is Bahana Securities.

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Yesterday (07/06), the main index of the Indonesia Stock Exchange (IHSG) fell by a total of 2.7 percent to close at 4,865.32 points. The size of this single day fall of Indonesia's IHSG has not been seen since November 2011 and illustrates waning confidence in Indonesia's economy. For eleven days in a row, foreign investors have been engaged in net selling as they have been concerned about ongoing uncertainty regarding the price hike of subsidized fuel, the continuing trade deficit as well as the steady fall of the IDR rupiah.

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Cipaganti Citra Graha, an Indonesian transportation company, will offer 40 percent of its stock equity to the public through an initial public offering (IPO). The company releases 2 billion shares with a nominal value of IDR 100 per share. These 2 billion shares consist of 1.75 billion new shares as well as 250 million shares that are owned by its holding company Cipaganti Global Corporindo. The company, which will be listed on 9 July 2013, will reserve 40 million shares for the employee stock allocation (ESA).

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In recent years, Astra International, one of Indonesia's largest diversified conglomerates, dominated the Indonesia Stock Exchange (IDX) in terms of market capitalization. However, it increasingly felt the competition of HM Sampoerna, Indonesia's largest tobacco company. Over the last five years, HM Sampoerna's market capitalization grew by a staggering 746.2 percent. It is also interesting to note that a  handful of Indonesian companies account for over one-third of market capitalization of Indonesia's stock exchange.

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PT Nippon Indosari Corpindo Tbk is Indonesia’s largest producer of bread products and its the country's only bread producing company that is listed on the Indonesia Stock Exchange (IDX). The company has shown robust growth in recent years due to the increased consumption of bread products by Indonesia's expanding middle class. Nippon Indosari controls a 90 percent market share in Indonesia's mass production of bread products. Its Sari Roti line of bread is a well-known brand in Indonesia.

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Market capitalization of the Indonesia Stock Exchange (IDX) has surpassed its psychological boundary of IDR 5,000 trillion (USD $512.82 billion) last week, supported by the new record high level position of the Indonesia Stock Index (IHSG) on Friday at 5,145.68 points. Up to 17 May 2013, the IHSG gained 18.41 percent this year, thus outperforming all other major stock indices in Asia except for the Philippines and Japan's Nikkei, which gained 41.64 percent this year amid an aggressive stimulus plan of the central bank of Japan.

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Although the benchmark stock index of Indonesia (known as Jakarta Composite Index or IHSG) was in the red zone prior to the release of Indonesia’s June inflation figure and May trade data, at the end of the day it finished slightly in the green zone. The IHSG climbed 0.13 percent to 4,884.83 points. The macroeconomic data that were released were positive and made market participants engage in stock trading. Moreover, the index was supported by Asian stock markets that were mostly up as well as the appreciating rupiah exchange rate.

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Despite Hong Kong’s falling Hang Seng Index (HSI), the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) managed to climb 0.69 percent to 4,878.58 points on Monday (30/06). A number of reasons can be cited that positively influenced the performance of the IHSG. These are higher US Michigan Consumer Sentiment, positive forecasts for tomorrow’s release of June inflation and the May trade balance of Indonesia, declining global oil prices and the appreciating Indonesian rupiah exchange rate.

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The performance of Indonesia’s benchmark stock index (known as Jakarta Composite Index or IHSG) was similar to the performance at the start of last week, possibly influenced by the presidential debates that took place a day prior to the past two Mondays. These debates, between the two presidential candidates (Joko Widodo and Prabowo Subianto), are broadcast live on national television and are important to outline each candidate’s vision and mission to the people. On 9 July 2014, Indonesians will vote for a new leader.

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The benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) declined 0.34 percent to 4,847.70 points on Friday (20/06). Trade was thin on this week’s last trading day with only about 3.4 billion shares - valued at IDR 3.8 trillion (USD $319 million) - being traded on the Indonesia Stock Exchange (well below the average daily value of IDR 6.1 trillion). Foreign investors accounted for 48 percent of total trading, recording net buying worth of IDR 31.3 billion (USD $2.6 million).

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ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the May 2014 edition, a number of important topics that are monitored include Indonesia's inflation rate, the trade balance, the BI rate, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt of the newsletter:

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Although at the end of Wednesday’s trading day (11/06) Indonesia’s benchmark stock index (known as the Jakarta Composite Index or IHSG) was up, the index had been moving in the red zone during most of the day. Moreover, the index did not get support from the Indonesia rupiah exchange rate nor did it get support from Asian stock indices which tended to decline after yesterday’s weakening indices on Wall Street. Fortunately, foreign investors recorded net buying, thus contributing to the 0.52 percent growth of the IHSG to 4,971.95 points.

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Just as unexpected as yesterday when the benchmark stock index of Indonesia (known as Jakarta Composite Index or IHSG) fell 1.06 percent amid positive domestic and international circumstances, the IHSG made a surprise rebound on Tuesday’s trading day. Yesterday’s fall was exorbitant and unfounded and today market participants made up for that performance by accumulating stocks that had lost value. As a result the IHSG gained 1.25 percent to 4,946.09 points on Tuesday (10/06).

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Contrary to most Asian stock indices which were positively influenced by Japan’s higher economic growth as well as rising indices on Wall Street last Friday (06/06), the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) fell considerably on Monday (09/06). Not even the appreciating Indonesian rupiah exchange rate could push the index back into the green zone. At the end of Monday’s trading day, the Jakarta Composite Index declined 1.06 percent to 4,885.08 points.

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It was interesting to follow the performance of the benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) on Thursday (05/06) as it managed to enter the green zone just minutes ahead of closing. Most of the trading day, the index had been in the red zone as Asian stock indices were mostly down on concerns about economic growth in China, the world's second largest economy. Furthermore, investors are still cautiously following the recent depreciating trend of the Indonesian rupiah.

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Although Indonesian Finance Minister Chatib Basri provided positive news to the market by stating that the country's trade deficit (and co-related current account deficit) will probably not be as large in the second quarter of 2014 (as compared to the same quarter in 2013) as well as an expected increase in Indonesian banks' consumer credit, the benchmark stock index (known as Jakarta Composite Index or IHSG) was unable to rise on Wednesday's trading day (04/06). Particularly local investors were eager to sell their Indonesian shares.

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