The Indonesia Stock Exchange (IDX) will increase the minimum ratio of shares that need to be listed on the IDX by a listed company. Through Regulatory No. I-A regarding the Listing of Shares & Equity Securities other than Shares Issued by Listed Companies (Peraturan Nomor I-A tentang Pencatatan Saham dan Efek Bersifat Ekuitas yang Diterbutkan oleh Perusahaan Tercatat), the minimum ratio of publicly issued shares is 7.5% of a company's total enlarged capital. If companies will not comply, they may face de-listing from the IDX.

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On Sunday 5 January 2014, Indonesia Investments released its latest newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on during the last seven days on our website. Most of the topics involve economic matters such as an update on Indonesia's inflation and current account deficit, initial public offerings (IPOs) in 2014, car sales, the Financial Services Authority (OJK) and Indonesia's aviation industry.

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Same as last year's result, the Indonesia Stock Exchange expects 30 Indonesian companies to conduct an initial public offering (IPO) in 2014. Ito Warsito, Director of the Indonesia Stock Exchange (IDX), said that 15 companies are targeted to become listed on the exchange in the first half of 2014. In January 2014, Link Net, Bank Panin Syariah, Bank Ina Perdana as well as Asuransi Mitra Maparya are expected to become listed companies as they have already been granted approval for this corporate action.

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The central bank of the United States, the Federal Reserve (FED), announced that it will start winding down its quantitative easing program in January 2014. Currently, the Fed purchases USD $85 billion worth of bonds per month but this amount will be reduced to USD $75 billion next month. The Fed came to this decision as prospects of the US labor market have shown a marked improvement, while economic growth is expected to accelerate to between 2.8 and 3.2 percent in 2014 and between 3.0 to 3.4 percent in 2015.

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On Wednesday (18/12), PT Industri Jamu dan Farmasi Sido Muncul, better known as Sido Muncul Herbal, was the 30th company that became listed on the Indonesia Stock Exchange (IDX) in 2013. The company, Indonesia's largest herbal medicine producer, offers 1.5 billion shares (about ten percent of its enlarged capital) to the public for the price of IDR 580 per share, thus aiming to generate IDR 8.7 trillion (USD $72.5 million) from today's initial public offering (IPO).

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Various analysts believe that the benchmark stock index of Indonesia (the Jakarta Composite Index or IHSG) can make a good jump in 2014 to the level of between 5,000 to 5,300 points (from 4,182 currently) despite the looming end of the Federal Reserve's quantitative easing program (QE3) which may result in temporary capital outflow from Indonesia's capital markets. The analysts believe that positive internal developments will provide solid support for the IHSG. These developments include the trade balance, rupiah exchange rate and general elections.

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Sawit Sumbermas Sarana (SSMS), a palm oil plantation company that conducted its initial public offering (IPO) on the Indonesia Stock Exchange on Thursday (12/12), aims for a 15 percent growth (yoy) in net profit in 2014 to IDR 207 billion (USD $17.3 million) as the price of crude palm oil (CPO) is expected to improve. The company's listing on the stock exchange (IDX) was a success, rising almost 12 percent on its debut, supported by foreign enthusiasm. Foreign institutional investors bought 81 percent of the stocks that were issued.

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In Bank Indonesia's Board of Governors' meeting - held on Thursday (12/12) - it was decided to keep the country's benchmark interest rate (BI rate) at 7.50 percent. Executive Director of Bank Indonesia's Communication Department Difi A. Johansyah said that the current rate of 7.50 percent is in line with the institution's inflation target of 4.5 percent (plus or minus one percent). The lending facility and deposite facility (Fasbi) rates are also maintained at 7.5 percent and 5.75 percent respectively.

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Yesterday (10/12), the 28th initial public listing (IPO) in 2013 on Indonesia's Stock Exchange was conducted. Financing company Indomobil Multi Jasa - with company code IMJS - offered 450 million shares, or 10.4 percent of its stake, to the public with a price tag of IDR 500 per share. The company is a subsidiary of Indomobil Sukses Internasional (IMAS), Indonesia's second-largest automotive distributor after Astra International. Through the IPO, the company aims to obtain IDR 225 billion for business expansion.

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The Indonesian rupiah exchange rate maintained its downward trend on Wednesday (27/11). Bank Indonesia's mid rate depreciated 0.41 percent to IDR 11,813 per US dollar. Investors remain concerned about Indonesia's wide current account deficit. Today, Finance Minister Chatib Basri said that the current account deficit will be around USD $30 billion by the end of 2013, significantly up from USD $24 billion at the end of 2012. In the third quarter of 2013, the current account deficit was USD $8.4 billion (3.8 percent of Indonesia's GDP).

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The benchmark stock index of Indonesia (Jakarta Composite Index or IHSG) climbed slightly on Monday (18/08), not being impacted - as we feared earlier - by mixed stock indices on Wall Street and Europe on Friday (15/08). Increased speculation about widening Chinese monetary policy in the country’s property sector made a good impact on Asian stock indices, including Indonesia’s IHSG. At the end of the trading day, the IHSG had strengthened 0.15 percent to 5,156.75 points, also supported by the appreciating rupiah (Bank Indonesia’s mid-rate).

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Weakening global stock indices meant that it would be difficult for the benchmark stock index of Indonesia (Jakarta Composite Index or IHSG) to continue its upward movement on Tuesday (05/08). Moreover, there were few positive sentiments originating from the Archipelago as Indonesia’s Q2-2014 GDP growth (+5.12 percent year-on-year) was below expectation and the country’s trade balance showed a deficit of USD $300 million in June 2014. Meanwhile, the Indonesian rupiah exchange appreciated slightly.

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Indonesian stocks and the rupiah exchange rate showed great volatility on Tuesday’s trading day (22/07). In the first part of the day the benchmark stock index of Indonesia (known as Jakarta Composite Index of IHSG) and rupiah strengthened on speculation that market favourite Joko “Jokowi” Widodo would win the presidential election without riots or other incidents that could trigger political uncertainties. On Tuesday evening, the General Elections Commission (KPU) indeed officially declared Jokowi the winner of the election.

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One day ahead of the official result of the Indonesian presidential election, the benchmark stock index of Indonesia (known as Jakarta Composite Index or IHSG) showed a good performance as market participants seem to speculate not only on a Joko Widodo win, but also on a peaceful and orderly course of events (no large scale demonstrations or riots). On Sunday, president Yudhoyono received both presidential candidates at the State Palace for dinner. This may have helped to cool some of the tension between supporters of both sides.

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Despite China’s positive economic growth of 7.5 percent in the second quarter of 2014, most Asian stock indices were down. Only Hong Kong's Hang Seng Index (HSI) managed to show a slight gain as large cap stocks were sought after. The HSI impacted positively on the benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) on Wednesday (16/07) which climbed 0.85 percent to 5,113.93 points on Wednesday (16/07). Foreign investors recorded net buying.

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Although the benchmark stock index (known as Jakarta Composite Index or IHSG) started the day in the green zone, it ended down due to profit taking as market participants prefer to wait for the official result of the Indonesian presidential election first. Both presidential candidates (Joko Widodo and Prabowo Subianto) declared a victory based on different unofficial quick count results. This has resulted in political uncertainty in Southeast Asia’s largest economy and thus investors refrain from buying Indonesian assets.

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ICRA Indonesia, an independent credit rating agency and subsidiary of ICRA Ltd. (associate of Moody's Investors Service), publishes a monthly newsletter which provides an update on the financial and economic developments in Indonesia of the last month. In the June 2014 edition, a number of important topics that are monitored include Indonesia's inflation rate, the trade balance, the BI rate, the IDR rupiah exchange rate, and gross domestic product (GDP) growth. Below is an excerpt of the newsletter:

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Initially we were concerned that Indonesia’s benchmark stock index (Jakarta Composite Index) would experience a sudden change of direction - after two days of strong gains at the start of the week - because the preliminary results of the 2014 Indonesian presidential election (based on unofficial quick counts) was mixed at first glance and thus triggers political uncertainty (something which is seriously disliked by investors). However, the index performed remarkably well and rose 1.46 percent to 5,098.11 points on Thursday (10/07).

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As all spotlights this week were - and still are - focused on the 2014 Indonesian presidential election, it almost passed unnoticeably that five Indonesian companies will be listed on the Indonesia Stock Exchange (IDX) this week. If all these listings will go according to schedule, then the number of initial public offerings (IPOs) in 2014 will increase to 18 by the end of the week. The five companies are: Batavia Prosperindo Internasional, Magna Finance, Mitrabara Adiperdana, Bank Dinar Indonesia, and Sitara Propertindo.

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Although Asian stock indices tended to decline on Monday’s trading day (07/07) due to profit taking amid expectation that corporate earnings in the first half of 2014 are disappointing, the benchmark stock index of Indonesia (known as Jakarta Composite Index or IHSG) performed remarkably well as foreign investors recorded net buying and the Indonesian rupiah exchange rate appreciated sharply. The main reason why markets were positive in Indonesia on Monday was the strong performance of Joko Widodo in Saturday’s presidential debate.

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