According to Indonesian Finance Ministry’s State Bond Director Loto Srinaita Ginting, the government of Indonesia intends to issue more than USD $500 million worth of samurai bonds in the fourth quarter of 2014. Samurai bonds are yen-denominated bonds. However, Ginting provided no further details about the bonds issuance. The Finance Ministry also plans to issue IDR 20 trillion (USD $1.7 billion) worth of domestic retail bonds in September 2014 (but these bonds are only available to Indonesians).

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The International Monetary Fund (IMF) assesses that the Asian region is still the world's most dynamic region in terms of economic growth. The IMF expects that Asia's economic growth will accelerate to 5.4 percent in 2014 despite the ongoing US Federal Reserve tapering of asset purchases. However, the IMF continued to stress the need for further structural reforms in Asia in an attempt to avert the negative impact of US tapering and future interest rate hikes. In 2013, the Asian region grew 5.2 percent.

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The government of Indonesia has been preparing strategies to face Japan's possible complaint to the World Trade Organization (WTO) about Indonesia's recently introduced export ban of mineral ore (UU Minerba No. 4 - 2009). A special team from Indonesia's Trade Ministry, headed by Gusmardi Bustami, has been set up to handle the dispute. Japan feels forced to bring the export ban case to the WTO because its industry is highly dependent on the supply of certain raw Indonesian commodities, particularly nickel.

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Indonesian exports are expected to rise 6.7 percent to IDR 1,399.7 trillion (USD $123.9 billion) in 2014 as a number of advanced markets (including the United States) have been showing signs of improving economies (the calculation of the figures was done by the Ministry of National Development Planning also known as Bappenas). Increased demand from these advanced markets will result in more exports of Indonesian manufactured products. Indonesian exports of natural resources, on the contrary, are expected to slow.

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On 06 April 2014, Indonesia Investments released the latest edition of its 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 our website in the last seven days. Most of the topics involve economic matters such as an analysis of March inflation and the February trade balance, the 2014 legislative election, a toll road construction tender, a possible dispute between Japan and Indonesia, Jakarta´s Giant Sea Wall, and more.

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The government of Japan is most likely to file a complaint to the World Trade Organization (WTO) about Indonesia's recently introduced ban on the export of mineral ore (UU Minerba No. 4 - 2009). Although the WTO is yet to receive a formal letter of protest, Indonesian newspaper Investor Daily reported on Friday (04/04) that Trade Minister Muhammad Lutfi has already received a letter from Japan's Minister of Foreign Affairs in which the step was announced. Japan feels forced to bring the case to the WTO as its industry is affected by the ban.

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Indonesia's Finance Minister Chatib Basri is optimistic that Indonesia's economic growth can reach 5.8 to 6.0 percent in 2014. According to Basri, three factors support this expectation: strong household consumption, an improving global economy, and the impact of Indonesia's legislative and presidential elections (scheduled for April and July 2014). However, one of the biggest challenges for the Indonesian government will be to offset the impact of further US Federal Reserve tapering and US interest rate hikes in 2015 and 2016.

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The number of expatriates working in Indonesia has declined in the last three years. Based on data from the Ministry of Manpower & Transmigration there were 68,957 expatriates working in Indonesia in 2013, a 4.8 percent decline from 2012. The main reason for this falling number is tighter government policy. Minister Muhaimin Iskandar stated that curtailing the influx of expats is one way of developing the country's human resources. Only when a foreigner has such exceptional qualities - not easily found in Indonesia - should he/she work in Indonesia.

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Market participants were pleased to see the trade balance of Indonesia posting an unexpected USD $1.52 billion surplus in December 2013, almost twice as high than previous forecasts. This December surplus is the highest monthly surplus since December 2011. Exports rose 6.56 percent from November 2013 and 10.33 percent from December 2012, while imports rose 2.04 percent from November 2013 but declined 0.79 percent from December 2012. Although showing an easing trend, Indonesia posted a trade deficit of USD $4.06 billion in full 2013.

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Mahendra Siregar, Chairman of the Indonesia Investment Coordinating Board (BKPM) said that Japan has replaced Singapore as the largest investor in Indonesia. In 2013, Japan invested USD $4.7 billion in Southeast Asia's largest economy, particularly in the automotive sector due to the sector's promising outlook as demand for cars among Indonesia's expanding middle class grows strongly. Singapore, which was the largest investor in Indonesia between 2010 and 2012, fell to second place with USD $4.6 billion worth of investments.

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Mitsui & Co, one of the largest trading companies in Japan, believes that Indonesia is one of the most prospective investment destinations for the middle and longer term. After Brasil and Chile, Indonesia is currently the third-largest investment market for Mitsui & Co, which is part of the Mitsui Group. The latter has stakes in various sectors including energy, food, logistics and finance. The CEO of Mitsui & Co, Masami Iijima, stated that Indonesia is lucrative due to its large and young population as well as its rapidly expanding middle class.

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Despite mixed European and American markets on Wednesday (23/01) and declining Asian markets on Thursday (23/01) as these responded to weak Chinese manufacturing data and South Korea's Q4-2013 GDP outcome, it was unable to block Indonesia's benchmark stock index (Jakarta Composite Index or IHSG) from extending its upward movement. The IHSG was supported by various positive company releases, including financial results of 2013, capital expenditure announcements, and new products or services releases.

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The upward revision of the IMF's outlook for global economic growth (raised to 3.7 percent) was able to boost several commodity prices. This then was a reason for investors to purchase mining stocks, which made a positive impact on the performance of Indonesia's benchmark stock index (known as the Jakarta Composite Index or IHSG) on Wednesday (22/01). Stocks in the consumer and trade sectors were also popular as speculation emerged that demand for consumer goods will rise due to the severe floods in several cities in Indonesia.

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In recent years, the Japanese economy has experienced significant hardships, generated largely by the aftermath of the hurricane and tsunami that hit the country in 2011. But newly adapted stimulus programs (the much-discussed programs of Abenomics) have boosted economic growth rates since that period. As a result, annual GDP is expected to rise to 1.8% for 2014, and these improvements are expected to have a supportive on the performances seen in surrounding economies in the Asia-Pacific region.

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The forming of a morning doji star indeed indicated that there was potential for continued upward movement of Indonesia's benchmark stock index (Jakarta Composite Index or IHSG) despite the profit taking actions that emerged and limited the gain of the index (particularly those stocks that went into the overbought area). Factors that contributed positively to today's (21/01) performance of the Jakarta Composite Index were rising Asian stock markets and a rebound in commodity stocks as a number of commodities recorded slightly higher prices.

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The movement of Indonesia's benchmark stock index (known as IHSG or Jakarta Composite Index) on today's trading day (20/01) was rather volatile. Investors returned to the market after the fall of the index was limited at the end of last week. However, China's slowing economic growth in the fourth quarter of 2013 (7.7 percent) brought negative market sentiments. Still, foreign investors were net buyers of Indonesian stocks today and in combination with an appreciating rupiah exchange rate, the index rose 0.44 percent to 4,431.57 points.

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Asia's stock indices were up after various US economic data (including non-farm payrolls and consumer confidence) were better than expected, including Indonesia's benchmark stock index (also known as the Jakarta Composite index or IHSG). The index climbed 0.80 percent to 4,214.34 points on Monday (09/12). Supported by foreign net buying, almost all sectoral indices of the IHSG were up. The economic policy package that was released by the Ministry of Economy this afternoon also provided support for the index and the rupiah.

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According to a survey of the Japan Bank for International Cooperation (JBIC), 44.9 percent of respondents assessed Indonesia as the most promising investment destination for the next three years. The respondents in this survey involved 500 Japanese companies that engage in international businesses. For Indonesia it is the first time in 21 years that it forms the preferred choice of overseas investments for Japanese companies, thus replacing China. In 2013, Japan already dominates foreign direct investment in Indonesia.

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Various factors contributed to the 2.30 percent decline of the Jakarta Composite Index (IHSG) on Tuesday (26/11). The index in fact fell below its support level. What were the main reasons for this weak performance? Firstly, the Indonesian rupiah exchange rate has been depreciating severely and causes concerns among market players. Secondly, most Asian stock indices fell as valuations climbed high and the Japanese Yen strengthened. Thirdly, European stock openings on Tuesday were weak. All these reasons together led to foreign net selling.

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On Thursday's trading day (21/11/13), the Jakarta Composite Index (Indonesia's benchmark stock index, or IHSG) fell 0.56 percent to 4,326.21 points as investors are concerned seeing the result of the latest Federal Open Market Committee (FOMC) meeting, which seems to indicate that the Federal Reserve's monthly USD $85 billion bond-buying program (quantitative easing) will be wound down within a couple of months. The IHSG was also negatively affected by the lower preliminary HSBC Manufacturing PMI of China.

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