Below is a list with tagged columns and company profiles.

Today's Headlines Quantitative Easing

  • G20 Summit Russia: Indonesia within the G20 Group of Major Economies

    The G-20 summit in St Petersburg (Russia), which is held on Thursday (05/09) and Friday (06/09), is not expected to result in unanimous support for a military action against Syria as China and Russia are opposing strongly to such an action. Indonesia's president Susilo Bambang Yudhoyono stated that Indonesia takes the middle road regarding the Syria-case. Apart from Syria, other topics that are discussed include the possible ending to the Federal Reserve's quantitative easing program, global economic growth and financial stability.

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  • IMF: Change in Global Dynamics, Emerging versus Developed Economies

    On Wednesday (04/09), the International Monetary Fund (IMF) released a report that describes a change in the current global economic dynamic as developed economies are showing signs of recovery, while growth in emerging markets is slowing down. These two developments are interrelated because stagnating developed economies from the late 2000s meant that investors started to look for lucrative assets in rapidly-growing emerging markets, including Indonesia.

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  • IMF Downgrades Indonesia's Economic Growth in 2013 to 5.25%

    The International Monetary Fund (IMF) expects the economy of Indonesia to expand by 5.25 percent in 2013, which is considerably lower than the IMF's earlier forecast. In its World Economic Outlook, released in April 2013, the institution set economic growth of Indonesia at 6.3 percent. However, after emerging markets were hit by large capital outflows when the Federal Reserve began to speculate about an end to its quantitative easing program (QE3), Indonesia's GDP growth assumptions were quickly revised downwards.

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  • Indonesia's Top Telecommunication Company Telkom Conducts Stock Split

    Indonesia's largest telecommunication & network provider Telekomunikasi Indonesia (Telkom) has conducted a stock split with a ratio of 1:5 yesterday (29/08). The company, which is majority owned by the Indonesian government and has a dominating market share of around 47% in terms of mobile phone subscribers in Indonesia, decided to conduct the stock split to increase the company’s share liquidity. A cheaper price will be more appealing to investors. The stock split was agreed upon at the general shareholders' meeting on 19 April 2013.

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  • Central Bank of Indonesia Raises its Benchmark Interest Rate to 7%

    Indonesia's central bank (Bank Indonesia) decided to raise its benchmark interest rate (BI rate) by 50 basis points to 7.0 percent on Thursday (29/08) in order to support the weakening rupiah amid slowing global economic growth. The rupiah has been on a long losing streak and has fallen to its lowest level against the US dollar in four years. The BI rate had already been raised in June and July from a historically low 5.75 percent to 6.50 percent. Today, an extra meeting was scheduled to discuss policy measures.

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  • Indonesia's Banking Sector Has No Difficulty Facing Economic Turmoil

    Indonesia's banking sector is expected to have no difficulties in coping with current financial turmoil in Indonesia's economy. The country's banking industry is much stronger and healthier now than when the crisis in 1997-1998 or 2008 erupted. There have been reports that a few small banks have used the central bank's overnight lending facility, but various stress tests indicate that the banking sector is strong. Gross non performing loans per June 2013 have been kept below1.9 percent, which is significantly lower compared to previous periods.

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  • Chatib Basri: GDP Growth Indonesia in 2014 Should Be Revised Down to 6%

    Finance minister Chatib Basri said that the Indonesian government should revise its outlook for GDP growth in 2014 from 6.4% (mentioned in the 2014 State Budget) to about 6.0%. A more realistic outlook, which is in line with the current global and domestic financial context, is needed. Global uncertainty due to the possible ending of the Federal Reserve's quantitative easing program has resulted in capital outflows from emerging markets, including Indonesia. Various countries, developed and emerging ones, have lowered outlooks for 2014 GDP growth.

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  • China's Financial Figures Impact Positive on Most Asian Indices

    Both China's imports and exports in July 2013 showed a rebound as they increased above expectation. Exports of the world's second-largest economy rose 5.1 percent (YoY), while imports surged 10.9 percent (which suggest improving domestic consumption). These results led to most Asian markets being up on Thursday (08/08). China's economy has been slowing down amid weak global demand and efforts to avert a credit boom. In 2012, the country's economy expanded 7.8 percent, the slowest pace in 23 years.

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  • Capital Outflows from Indonesia as Fed's Quantitative Easing May End

    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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  • Three Companies Newly Listed on the Indonesia Stock Exchange

    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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Latest Columns Quantitative Easing

  • Jakarta Composite Index (IHSG) Down Amid Falling Asian Markets

    Falling stock indices on Wall Street on Wednesday (04/12) impacted on Asia the following day resulting in the majority of Asian indices being down on Thursday's trading day (05/12), including the benchmark stock index of Indonesia (IHSG). Besides the impact of Wall Street, Asian stock markets are also vulnerable to ongoing concern about the future of the Federal Reserve's quantitative easing program. In the case of Indonesia, negative market sentiments are intensified by the continued depreciation of the rupiah exchange rate.

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  • Indonesia Rupiah Exchange Rate: How Will Bank Indonesia Respond?

    In the morning of Thursday (05/12), Indonesia's rupiah exchange rate depreciated beyond the psychological level of IDR 12,000 per US dollar. In the Bloomberg Dollar Index, the rupiah fell 0.2 percent to IDR 12,011 as of 09:19:49. The main factor behind this decline is market participants' concerns about the end of the Federal Reserve's monthly USD $85 billion bond buying program. It is increasingly speculated that the winding down of this program will start sooner than expected.

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  • Indonesia's Jakarta Composite Index (IHSG) and Rupiah Continue Decline

    Indonesia's Jakarta Composite Index (IHSG) and Rupiah Continue Decline

    The continued presence of negative market sentiments made it impossible for Indonesia's Jakarta Composite Index (IHSG) to rebound. The looming end of the FED's quantitative easing program - which may be wound down sooner than expected - is a big cause for concern. The depreciating Indonesia rupiah exchange rate intensifies these concerns, particularly regarding companies that have exposure to volatile US dollar movements. Furthermore, investors are waiting for further US economic data as well as for Bank Indonesia's next meeting.

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  • Indonesia Inflation Update: Consumer Price Index Moving Sideways

    The inflation rate of Indonesia rose slightly in November 2013 (month-to-month) and confirms estimations that inflation in Southeast Asia's largest economy is under control after having accelerated sharply due to the introduction of higher subsidized fuel prices June 2013. In recent months, inflation moved sideways and is expected to ease considerably in the first quarter of 2014. Indonesia's consumer price index rose 0.12 percent in November due to rising electricity, processed foods and health care costs.

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  • Indonesia's October 2013 Trade Surplus Provides a Glimmer of Hope

    Although widespread concerns about Indonesia's prolonged trade deficit (and current account deficit) are far from unfounded, the country's October 2013 trade data show a positive result. On Monday (02/12), Statistics Indonesia announced that Southeast Asia's largest economy posted a small trade surplus of USD $42.4 million in October after having recorded a trade deficit of USD $810 million in the previous month. This calender year (January to October 2013), the trade deficit has accumulated to USD $6.36 billion.

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  • Jakarta Composite Index Ends on a Positive Note Despite Uncertainty

    The Jakarta Composite Index (Indonesia's benchmark stock index which is also known as the IHSG) gained 0.53 percent on Friday (29/11) and ended on 4,256.43 points. Today's trading day was relatively quiet with a transaction value of only IDR 3.30 trillion (USD $276.50 million). Foreign net buying of Indonesian shares supported the IHSG index to end this month's last trading day on a positive note. Sectors that performed well were agriculture (+2.18 percent), construction (+1.27 percent), and mining (+0.99 percent).

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  • Analysis of the Indonesian Rupiah Exchange Rate in November 2013

    On Friday (29/11), the last trading day of November 2013, the Indonesian rupiah exchange rate continued its downward spiral. The Jakarta Interbank Spot Dollar Rate¹ fell 0.39 percent to IDR 11,970 per US dollar amid concern about the winding down of the quantitative easing program, Indonesia's wide current account deficit, a disappointing US dollar-denominated bond auction and surging US dollar demand for earnings repatriation as well as foreign debt payment. Considering the full month of November, the rupiah depreciated 6.61 percent.

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  • Indonesia Financial Market Update: Indonesia's Current Account Deficit

    Currently, one of Indonesia's main financial issues (and one which puts serious pressures on the Indonesian rupiah exchange rate) is the country's wide current account deficit. According to data from Statistics Indonesia, Indonesia's current account deficit totaled USD $8.4 billion in the third quarter of 2013. This figure is equivalent to a whopping 3.8 percent of Indonesia's gross domestic product (GDP). Generally, a current account deficit that exceeds 2.5 percent of GDP is considered unsustainable.

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  • ADB Report: Asia Should Strengthen Economies and Financial Systems

    Emerging East Asian countries should use the window of opportunity opened by the delay in US monetary policy normalization to strengthen their economies and financial systems, the latest quarterly Asia Bond Monitor from the Asian Development Bank (ADB) urges. “A delay in US bond tapering gives the region a bit of extra time to make sure its economy and financial systems are resilient enough to face the likely market volatility ahead,” said Iwan J. Azis, Head of ADB’s Office of Regional Economic Integration which produced the report.

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  • Time for Indonesia to Be Sovereign on the Indonesian Stock Market

    In the last three months, Indonesia's benchmark stock index (IHSG) experienced continued selling pressures causing the index to plunge from a high of 5,215 to a low of 4,026. The country's economic slowdown and net selling by foreign investors triggered the rapid decline. Up to the third week of November, net selling of Indonesian stocks amounted to IDR 14.9 trillion (USD $1.3 billion). The looming winding down of the Federal Reserve's USD $85 billion per month bond buying program has brought significant negative market sentiments.

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