Below is a list with tagged columns and company profiles.
Latest Reports China
While Indonesia Investments predicted the decline in imports into Indonesia in May 2021 – after Ramadan and Idul Fitri momentum had passed – we were surprised to see a significant drop in the country’s exports that same month.
Although the overall trade balance of Indonesia in March 2021 showed the smallest surplus for the country in nine months – with a USD $1.57 billion surplus in March 2021 – this is probably something that goes unnoticed considering both the export and import performance of Indonesia were quite impressive in March 2021.
Over the past couple of months Indonesia’s export performance improved markedly on the back of stronger commodity prices. Considering Indonesia is blessed with the presence of a wide variety of commodities (involving all three types of commodities, namely: agriculture, energy, and metals), the country’s exports obviously get a major boost in times of strengthening commodity prices.
Last month we were still a bit pessimistic about Indonesia’s trade performance, with bleak imports into Indonesia being the main reason (while the country’s impressive export performance is nice, but essentially the result of Indonesia’s over-dependence on raw commodity prices, which is actually a structural weakness of Southeast Asia’s largest economy).
Indonesia posted a USD $21.74 billion trade surplus in full-year 2020. This is a great recovery from the USD $3.59 billion trade deficit the country saw one year earlier.
Ever since the very start of the global COVID-19 crisis in early 2020, Indonesia has been recording a series of big trade surpluses each month. On the one hand, it is a welcome surprise as big monthly trade surpluses relieve pressures on Indonesia’s current account balance and rupiah exchange rate.
Based on the latest data from Indonesia’s Statistical Agency (Badan Pusat Statistik, BPS), which were released on 16 November 2020, Indonesia recorded an impressive USD $3.61 billion trade surplus in October 2020. The surplus is at a level we had not seen since the final stages of the 2000s commodities boom (late-2011 to be exact).
Last month we basically came to the conclusion that the novel coronavirus (COVID-19) crisis has a direct (short-term) positive effect on Indonesia’s trade performance (although the longer term consequences are clearly negative) as Indonesia managed to boost exports (possibly because it filled the gap left by China’s lockdown), while imports into Indonesia fell markedly (partly because of the lower need for inputs for export-oriented output), thus leading to a comfortable trade surplus.
Amid the novel coronavirus (COVID-19) crisis, Indonesia managed to post a strong trade surplus in February 2020. Based on the latest data released by Statistics Indonesia (BPS), Indonesia recorded a USD $2.33 trade surplus. It was the largest monthly trade surplus for Southeast Asia’s largest economy since September 2011.
It is important to put Indonesia into international context because decisions that are made by Indonesian policymakers are (partly) based on global developments.
Latest Columns China
Despite mixed Asian stock indices because of negative news from China and Japan, certainty about the increase in the price of Indonesia’s subsidized fuel after the plenary meeting of the House of Representatives (DPR) on Monday (17/06) formed a pillar of support for Indonesia’s main stock index (IHSG) on Tuesday’s trading day (18/06). Investors took the opportunity to buy stocks, particularly Indonesia’s big cap stocks, after these had experienced significant falls last week due to profit taking actions amid an uncertain market.
Despite weakening stock indices in the United States on Friday (14/06), most Asian indices were up on Monday (17/06) and impacted positively on the main index of Indonesia (IHSG). On the other hand, market participants are still waiting for the outcome of the plenary session of Indonesia's House of Representatives (DPR) regarding the approval of the increase in the price of subsidized fuel. The market is speculating that the price increase will be approved even though a number of political parties oppose the plan.
Negative market sentiments, especially originating from within Indonesia, made investors shy away from Indonesia's main stock index (IHSG) on Monday (10/06). Similar to last Friday, when the index fell 2.70 percent, foreign investors continued to sell large proportions of their Indonesian stock portfolios. The index lost 1.81 percent today as investors are concerned about the current state of Indonesia's economy. Other major indices of Asia were mixed but with a strengthening tendency, despite weak data from China.
Indonesia's main stock index (IHSG) was mixed on Tuesday's trading day (04/06) as negative market sentiments were still felt after yesterday's tumble (inflicted by Indonesia's April trade deficit). Foreigners continued to sell parts of their Indonesian stock portfolios causing the index to fall below the psychological boundary of 5,000 points, which also meant that it went into oversold territory. But the rise of the Yen, thus supporting Asian indices, in combination with positive openings in Europe made the IHSG rise in the end.
Asian stock markets were mixed on Thursday (30/05). Particularly Hong Kong's Hang Seng Index (HSI) was negatively influenced by Wednesday's falling stock indices in Europe and the USA. In this context, Indonesia's main index (IHSG) was hit as well and fell 1.37 percent to 5,129.65 points. Moreover, the continuing decline of the IDR rupiah makes market participants less enthusiastic to purchase Indonesian stocks. Foreigners were also anxious to sell part of their stock portfolios.
The upward movement of American and European stock indices on Tuesday (28/05) made a good impact on Indonesia's main index (IHSG) on Wednesday (29/05). Despite Asian markets being mixed and the Hang Seng Index (usually the reference point for Asian indices) falling, the IHSG succeeded in surpassing the next psychological boundary at 5,200 points. Overall, foreign investors recorded a net sell but it was offset by a net buy in a number of big caps: Perusahaan Gas Negara, Jasa Marga, Indo Tambangraya Megah and United Tractors.
Although the stock markets of the USA and England were closed on Monday (27/05), strong European and Asian indices indicated that market participants were back in business. This also applied to the main stock index of Indonesia (IHSG), which regained the points it had lost on Monday. A number of blue-chips were chased by investors: Astra International, Unilever Indonesia, Lippo Cikarang and Semen Indonesia. Foreigners were particularly interested in stocks of Bank Mandiri, Bank Pembangunan Daerah Jawa, and Waskita Karya.
The weak stock indices in Europe and USA at the end of last week had a negative impact on stock indices in Asia on Monday (27/05/13), including Indonesia's main stock index (IHSG). Investors rushed to reduce their stock portfolios, which resulted in an 1.36 percent fall to 5,085.14 points. At the end of last week, the IHSG had formed a green candlestick but today there were no continued positive signals as the market lacked positive sentiments. But a number of rising Asian indices and the positive openings of European stock indices managed to support the IHSG a bit.
Throughout the month of May, the level of volatility of Indonesia's main stock index (IHSG) has been remarkable and interesting. At the start of the month we were shocked by Standard & Poor's downgrade of Indonesia's credit rating outlook as well as Moody's warning to take similar measures as Indonesia had been slow to deal with its subsidized fuel policy. These issues were able to drag the index down. Moreover, the threat of higher inflation triggers concerns that the index would show its traditional fall in the month of May.
Various negative sentiments made investors decide to engage in profit taking today (23/05). As Indonesia's main stock index (IHSG) had already reached the overbought area, it is highly susceptible of profit taking in case some negative news is released. But this time there were quite a lot of matters that made a negative impact: weak American indices on Wednesday (22/05) responding to the FOMC meeting, a spike in Japan's government bond yields, and Chinese manufacturing data that seems to indicate a contraction.
Associated businesses China
