Below is a list with tagged columns and company profiles.

Today's Headlines Global Economy

  • PP London Sumatra Indonesia: Feeling the Impact of Weak Global Demand

    Perusahaan Perkebunan London Sumatra Indonesia (PP London Sumatra Indonesia or Lonsum), controlled by the powerful Salim Group, is an Indonesian plantation company focused on the production of palm oil, rubber, tea and cocoa. Its estates are located on the islands of Sumatra, Java, Kalimantan and Sulawesi. Amid weak global demand for commodities, the company posted a 72.1 percent fall in net profit over the first six months of 2013. Its shares have fallen 48.0 percent since the first trading day of 2013.

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  • Commodities in Indonesia's Mining and Agricultural Sectors still Weak

    Commodities in Indonesia's Mining and Agricultural Sectors still Weak

    That global demand for Indonesian commodities in both the mining and agriculture sectors is still far from recovered is reflected by several financial reports, covering financial results over the first half of 2013, that were published today (15/08). Three Indonesian companies engaged in Indonesia's mining and agriculture sectors posted significantly reduced net profits compared to the same period in 2012. These companies are Indo Tambangraya Megah, Salim Ivomas Pratama, and Perusahaan Perkebunan London Sumatra Indonesia.

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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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  • Indonesia's Economic Growth Slows Down to 5.81% in Q2-2013

    Today (02/08), Indonesia's bureau for statistics announced that economic growth of Indonesia in the second quarter of 2013 reached 5.81 percent (YoY), which is the lowest growth rate since Q3-2010 and also lower than most analysts as well as the Indonesian government expected. The GDP figure reflects Indonesia's cooling economy. For the fourth consecutive quarter, the rate has weakened as the country has been under pressure: high inflation, a widening trade deficit and a weakening rupiah.

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  • Indonesia's Economic Growth Expected at 6.1% in Semester I-2013

    According to Finance minister Chatib Basri, the Indonesian government expects the country's gross domestic product (GDP) to have grown by 6.1 percent in the first six months of 2013. This forecast falls short of the government's 6.3 percent GDP growth assumption in the state budget (APBN). Basri stated that the lower outcome is due to global factors, such as slowing economic growth in China and India. But the government's assumption is more optimistic than the forecast of the central bank, which expects growth between 5.1 and 5.9 percent.

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  • Indonesian Banks Post Good Financial Results in Semester I-2013

    Despite a higher benchmark interest rate, higher inflation, a weakening rupiah, and global economic turmoil, four out of seven Indonesian banks that released their financial results over the first half of 2013, have posted double-digit growth. The seven banks show a combined growth of 16.2 percent. Although it is an impressive figure, it is a couple of percentage points lower than last year's performance. Indonesia's economy has slowed down to an annual economic growth of six percent and this has impacted on domestic demand for credit loans.

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  • Weakening of Indonesian Rupiah Against US Dollar is Part of Global Trend

    According to various analysts and the central bank of Indonesia, the weakening of the IDR rupiah should not be too alarming as there currently is a global trend in which currencies, worldwide, weaken against the US Dollar. This situation is triggered by the economic recovery that has been experienced by the world's largest economy recently. Compared to other ASEAN members, the rupiah's decline is normal. The central bank adds that foreign capital inflows will return and will strengthen the country's currency.

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  • Standard Chartered Bank Positive about Indonesia's Economic Potential

    Standard Chartered Bank expects economic growth in Indonesia in 2013 to remain robust at 6.2%. The bank believes this is a realistic assumption amid global economic uncertainty and higher subsidized fuel prices which limits people's purchasing power. The greatest pillar of support for Indonesia's GDP growth is domestic consumption, and which is supported by Indonesia's demographic composition as the country not only has a large population (over 240 million people), but also a young one (half of the population is below thirty years of age).

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  • Indonesia Economic Quarterly World Bank Report: Adjusting to Pressures

    On 2 July 2013, the World Bank released its July edition of the Indonesia Economic Quarterly. The report, titled Adjusting to Pressures, touches on the key developments over the past three months in Indonesia’s economy and places these in a longer term and global context. It regularly updates the outlook for the country’s economy and social welfare, and provides a more in-depth examination of selected economic and policy topics, as well as analyses of medium term development challenges.

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  • Economy of Indonesia Projected to Grow 6% in Quarter II 2013

    According to Bambang Brodjonegoro, current head of the Fiscal Agency (a department under the wings of Indonesia's Finance Ministry), Indonesia's economy will grow 6.0 percent in the second quarter of 2013. This growth rate is lower than originally forecast due to the impact of a global unstable environment. Economic growth in Q2-2013 is also likely to be below the Q1-2013 result of 6.02 percent. A few weeks ago, the government of Indonesia had already revised down its GDP forecast for 2013 from 6.8 percent to 6.3 percent.

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Latest Columns Global Economy

  • Fitch Ratings: Major Indonesian Banks Resilient Against Market Turmoil

    Fitch Ratings: Major Indonesian Banks Resilient Against Market Turmoil

    According to global credit rating and research agency Fitch Ratings, Indonesia's major banks are robust against the rupiah currency slide due to their low unhedged foreign currency exposure, strong loss-absorption cushions and - in some cases - foreign ownership. The slowdown in the economy will weigh on these (rated) banks' operating environment, but is unlikely to damage their credit profiles to any great extent. Below we provide Fitch Ratings' report. This report can also be accessed on their website.

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  • Indonesia Stock Index Rebounds on Tuesday; Rupiah Depreciates

    Indonesia's benchmark stock index (IHSG) rebounded on Tuesday (03/09) amid rising Asian stock indices inflicted by optimism about economic recovery in China and the USA. The IHSG rose 1.53 percent to 4,164.12 points. Agribusiness and mining stocks were the top performers today, while the miscellaneous industry, which fell 0.09 percent, was the only sectoral index on the Indonesia Stock Exchange (IDX) that was down. The rupiah depreciated against the US dollar as investors are concerned about July's USD $2.3 billion current account deficit.

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  • Market Update: Eurozone Posts Good Data, USA Waiting for Decisions

    Most European stock indices rose sharply on Monday (02/09) as investors were happy to see favorable industrial data from China and the Eurozone. The benchmark stock indices in Paris, Frankfurt, London and Amsterdam climbed up to 1.8 percent. Trade was relatively quiet as Wall Street was closed due to Labor Day celebrations. However, it may be a 'calm before the storm' because on Friday (06/09) new official data about U.S. job creation will be released, while next week more clarity about a military operation in Syria is expected.

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  • Government Stance on Indonesian Economy and Investors' Reaction

    Last week Friday (30/08), Indonesia's benchmark stock index (IHSG) ended 2.23 percent up to the level of 4,195.09 points, continuing its three-day 'winning streak'. Underlying reasons being the central bank's new policy package (that was released as a response towards the negative impact of global turmoil on Indonesia's financial stability) and the higher benchmark interest rate (BI rate). The BI rate was raised 50 basis points on Thursday (29/08) to 7.0 percent to stabilize the weakening rupiah that fell to IDR 11,000 per US dollar.

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  • Indonesian Government Revises State Budgets of 2013 and 2014

    Indonesian Government Revises Macroeconomic Assumptions of 2013 and 2014

    The government of Indonesia has revised the macroeconomic assumptions that are stated in the State Budgets (APBN) of 2013 and 2014 after a meeting with the budgetary body of the House of Representatives (Badan Anggaran DPR) on Wednesday (28/08). It is the third time that the 2013 State Budget has been revised in order to put it more in line with recent global developments. As the government was also too optimistic when drafting the 2014 Budget, it felt the need for a revision (only 12 days after the announcement of the Budget).

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  • Global Markets Down due to Syria; Indonesia Stock Index Falls 3.71%

    Most of us who were hoping for a limited weakening of Indonesia's benchmark stock index (IHSG) today (27/08) were to be disappointed. Instead of a limited decline, the IHSG fell 3.71 percent to 3,967.84 points. Market participants are concerned about both the global and domestic economy, thus pulling money out from Indonesia. The weakening rupiah and weak stock index openings in Europe (due to tensions in Syria) pushed the IHSG further down into red territory. Foreign investors were again net sellers of Indonesian assets.

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  • Current Account Deficit of Indonesia Expected to Ease to 2.5% of GDP

    Indonesia's current account deficit, which caused much alarm among the investor community, is expected to ease to about 2.5 percent of gross domestic product (GDP) in the second half of 2013. This assumption is supported by Indonesia's central bank and various analysts. The country's current account deficit reached USD $9.8 billion or 4.4 percent of GDP in Q2-2013. In combination with the weakening rupiah, higher inflation and the possible end to the Federal Reserve's quantitative easing program, investors have been pulling money out of Indonesia.

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  • Indonesian Government Reacts to the Impact of Global Financial Turmoil

    Despite the announcement of an economic policy package aimed at overcoming the impact of global financial turmoil, Indonesia's main stock index (IHSG) was not able to end the week on a positive note, while the value of the rupiah on the spot market depreciated 1.68 percent to IDR 11,058 per US dollar on Friday (23/08) amid a majority of strengthening Asian currencies, including the Indian rupee (0.67 percent) and the Thai baht (0.28 percent). Based on Bank Indonesia's mid rate, the rupiah fell 4.4 percent against the US dollar to IDR 10,848 last week.

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  • Bank Indonesia Takes Steps to Maintain Macroeconomic Stability

    Bank Indonesia Takes Steps to Maintain Macroeconomic Stability

    Similar to the Indonesian government, Indonesia's central bank also announced a fiscal policy package to support sustainable nationwide economic growth by curbing inflation, maintaining a more sustainable balance of payments as well as strengthening financial system stability. These additional policies are expected to synergise with the policy package unveiled by the government on Friday (23/08). These measures were taken as both the rupiah and Indonesia's main stock index (IHSG) are in a downward spiral.

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  • Concern over Ailing Rupiah Intensifies; Government Prepares Package

    Concerns about Indonesia's weakening rupiah intensified on Wednesday (21/08) as the currency is now balancing on the psychological boundary of IDR 11,000 per US dollar. The rupiah continued its downward spiral today although its decline was limited due to the intervention of Indonesia's central bank (Bank Indonesia) that started selling US dollars again in an effort to support the rupiah. According to data compiled by Reuters, the rupiah has now fallen 10.7 percent this year.

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