Indonesian Stocks & Rupiah: State-Owned Firms to Buy Back Shares
There are few signs that Indonesian stocks and the rupiah will rebound on Tuesday (25/08). Benchmark stock indices of China and Japan continued to fall directly after opening on Tuesday and are therefore expected to drag down other markets in Asia. Yesterday, major markets in the USA and Europe slumped, while commodity prices hit new lows (oil slid below USD $40 per barrel for the first time since 2009). The rupiah continued to weaken after opening on Tuesday to IDR 14,065 per US dollar by 09:06 am local Jakarta time.
However, the Jakarta Composite Index will get some support from Indonesian state-owned enterprises (SOEs) as it was announced by State-Owned Enterprise Minister Rini Soemarno that Indonesian SOEs will spend a combined IDR 10 trillion (approx. USD $710 million) to buy back shares today.
Yesterday, markets continued to plummet, particularly on concern about China’s economic slowdown.