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21 April 2025 (closed)
Jakarta Composite Index (6,445.97) +7.70 +0.12%
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Indonesia's central bank (Bank Indonesia) said the nation's foreign exchange reserves rose to USD $128.8 billion at the end of August 2017, higher than the USD $127.8 billion one month earlier. This growth was primarily attributed to foreign exchange receipts from tax revenues and government oil & gas export proceeds, as well as auctions of Bank Indonesia's foreign exchange bills.
Based on the Bloomberg Dollar Index, the Indonesian rupiah had appreciated 0.65 percent to IDR 13,221 per US dollar by 10:30 am local Jakarta time on Friday morning (08/09), extending Thursday's gains when the rupiah strengthened 0.20 percent against the greenback. What explains this strong rupiah performance?
The central bank of Indonesia (Bank Indonesia) is convinced that geopolitical troubles on the Korean peninsula will not impact negatively on the Indonesian rupiah exchange rate. Bank Indonesia Agus Martowardojo said he sees little impact (yet) but emphasized that the lender of last resort will continue to carefully monitor persistent tensions that have heightened after North Korea's latest nuclear test - its biggest-ever - on Sunday (03/09).
On Wednesday (06/09) Asian stocks are following the example of Wall Street's slide overnight. The benchmark MSCI Asia was down 0.66 percent by 10:15 am local Jakarta time on Wednesday morning. This weak performance is attributed to persistent concerns about North Korea's provocative behavior, while any non-violent sanctions against North Korea will unlikely encourage the nation to stop its nuclear program.
Asian stocks are in red territory on Monday (04/09), as expected, amid heightened concerns about North Korea's nuclear program. Over the weekend the nation conducted its sixth - and most powerful - nuclear test. Even more alarming, North Korea claims it has developed a hydrogen bomb; a bomb that is more powerful than the atomic bombs that were dropped on Japan's Hiroshima and Nagasaki by the United States in World War II.
The Indonesian government proposed the rupiah value at IDR 13,500 per US dollar in the 2018 State Budget (that still requires approval from the House of Representatives). This implies the government expects the rupiah to depreciate modestly in the period ahead. Currently, the rupiah is trading at IDR 13,356 per US dollar (21/08). In the Revised 2017 State Budget the rupiah value target was set at IDR 13,400 per US dollar.
In local Indonesian media it is reported that Indonesian President Joko Widodo has given his blessing to the central bank (Bank Indonesia)'s plan to redenominate the rupiah. Bank Indonesia has already prepared a draft bill on the redenomination of the Indonesian Rupiah with the aim to improve economic efficiency and to create smoother commercial transactions. While the rupiah value would remain unchanged, the draft bill eyes to remove the last three zeros on all rupiah bills and coins.
Indonesia's benchmark Jakarta Composite Index is expected to be under pressure on Monday (24/07) as markets await the release of corporate earnings reports (for example Amazon.com Inc, GlaxoSmithKline Plc and Credit Suisse Group AG will release their earnings this week) as well as the Federal Reserve meeting on Wednesday (26/07). The Fed is expected to keep its monetary policy unchanged but investors will be looking for clues about the timing of the unwinding of the balance sheet.
Asian shares are under pressure on Friday morning (07/07) due to declines on Wall Street overnight. These declines were caused by the ADP jobs report, released on Thursday (06/07), that missed estimates as well as by rising tensions surrounding North Korea's ballistic missile tests and a tech sell-off. Meanwhile, global sovereign debt yields rose on expectation that the European Central Bank (ECB) is moving closer toward unwinding its massive monetary stimulus.
After the week-long holiday Indonesian stocks made an impressive return on Monday (03/07). Indonesia's benchmark Jakarta Composite Index surged 1.38 percent to 5,910.24 points, another record high position, led by financial and telecommunication stocks. Investors were in the mood to buy Indonesian shares after the long holiday. Moreover, positive Chinese economic data and Indonesia's easing core inflation provided more reasons for investor appetite.
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After finishing last week with three consecutive days of gains, Indonesia's main stock index (IHSG) reached up to 4,633.11. However, its movement is still rather volatile. Property, finance and consumption stocks were sold by investors after seeing the benchmark interest rate raised by Bank Indonesia (by 50 bps to 6.50 percent) on Thursday (11/07), while metal stocks formed the main supporter of the index at the end of the week. Trading volume in the regular market hit 5.2 trillion and foreigners recorded net purchases of IDR 288 billion.
Indonesia's main stock index (IHSG) was able to continue its rise on Thursday (11/07) despite mixed markets in the United States and Europe, that were waiting for the release of the Federal Reserve minutes, on the previous day. The minutes and Ben Bernanke's speech indicate that the bond-buying program will be continued for a while and this made investors decide to buy Indonesian assets, particularly large cap stocks such as Unilever Indonesia, Bank Mandiri and Indocement Tunggal Prakarsa.
Today, Bank Indonesia surprised many analysts and investors by raising its benchmark interest rate by 50 bps to 6.50 percent. Indonesia's central bank assessed that this measure is the correct one with regard to supporting the IDR rupiah (which is one of the worst Asian currencies against the US dollar this year) and to fight higher inflation after the government decided to cut fuel subsidies in June. It expects inflation to peak in July at about 2.3 percent (month to month) but to moderate soon afterwards.
Indonesia's central bank (Bank Indonesia) expects that economic growth of Indonesia in 2013 will not meet the government's target as has been set in the revised State Budget (APNB-P). Last month, both government and parliament of Indonesia agreed on a revised GDP growth assumption of 6.3 percent. However, Bank Indonesia believes that, due to slowing domestic consumption and investments in the current global economic context, the growth is more likely to fall between 5.8 and 6.2 percent.
Higher American indices after the release of ADP employment change and lower initial jobless claims made an indirect impact on Asian stock indices, including Indonesia's main stock index (IHSG) on Thursday (04/07). Investors used the positive outcomes of these data to start purchasing stocks, although in limited quantities. Foreign investors, however, are still selling more Indonesian shares than they buy, which subsequently results in limited growth of the IHSG on Thursday (04/07). The index grew 0.10 percent to 4,581.93.
Indonesia's main stock index (IHSG) took another large blow on Wednesday (03/07). The index fell 3.20 percent to 4,577.15 points as investors were worried after reading the revised outlook of the World Bank. The institution downgraded its forecast for economic growth in Indonesia in 2013 from 6.2 percent to 5.9 percent. Higher inflation, because of the recent subsidized fuel price hike, is expected to result in lower domestic consumption. The IDR rupiah posted a slight weakening to IDR 9,941.
Weakening American and European stock indices on Tuesday (02/07), as investors mostly refrained from trading ahead of Wednesday when a number of important US economic data are released, caused negative market sentiments in Asia today (03/07). Moreover, the market responded negative towards the World Bank's July report in which the outlook for economic growth of Indonesia in 2013 was cut to 5.9 percent (from 6.2 percent). Lastly, a gap at 4,620 - 4,644 still needed to be closed.
The World Bank has revised down its forecast for economic growth in Indonesia in 2013 to 5.9 percent from its original estimate of 6.2 percent. Similarly, the institution has altered its forecast for economic growth in 2014 from 6.5 percent to 6.2 percent. The revised figures were published in July's edition of the Indonesia Economic Quarterly (IEQ), titled 'Adjusting to Pressures'. The World Bank's forecast is also in sharp contrast with the GDP assumption of the Indonesian government, which puts economic growth in 2013 at 6.3 percent.
Asian stock indices were up on Thursday (27/06) after economic growth of the United States in Q1-2013 was lower than expected. Paradoxically, this had a positive effect on global stock indices as speculation arose that the disappointing growth rate would convince the Federal Reserve to continue its quantitative easing program. It also had a good affect on Indonesia's main stock index (IHSG), which gained 1.92 percent and ended at 4,675.75. The index was well on its way to close a gap (at 4,743-4,801) but was blocked by mixed European openings.
It has been a long time since we have reported a good day at the Indonesia Stock Exchange (IDX). But finally on Wednesday (26/06) Indonesia's main stock index (IHSG) made a great jump upwards, supported by American and European stock indices that were up on Tuesday (25/06) due to positive economic data from the United States. Investors used this positive context to engage in stock trading. Moreover, Indonesia's stocks are currently - technically speaking - cheap and thus attractive.
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