Indonesia Leads EM Rally as Carry Appeal, Growth Lure Investors

[Indos]

Jakarta Composite Index Hits New Record as Market Sentiment Remains Positive​

Faisal Maliki Baskoro

September 14, 2024 | 10:56 am


Jakarta. The Jakarta Composite Index (JCI) set a new record over the weekend, rising 0.18 percent to 7,812.131 from its previous high of 7,798.154 on Thursday. Market capitalization also hit an all-time high, climbing 4.46 percent to Rp 13,390 trillion ($868.82 billion).

For the week, the JCI gained 1.17 percent, closing at 7,812.131 from 7,721.846. Foreign investors posted a net buy of Rp 17.95 trillion on Friday, bringing the total net buy for 2024 to Rp 51.40 trillion.

Average daily transaction value surged 40 percent to Rp 14.98 trillion, while daily trading volume increased 10.79 percent to 23.34 billion shares. The frequency of daily transactions also rose by 1.66 percent to 1.14 million.

NH Korindo Sekuritas expects the JCI to remain buoyed by regional market sentiment and speculation of a potential US Federal Reserve rate cut during the September 17-18 FOMC meeting. Despite a higher-than-expected 0.2 percent rise in the US Consumer Price Index (CPI) for August, attention remains focused on the anticipated Fed decision.

“The JCI remains in positive territory, with weekly gains nearing 1 percent. A 'let your profit run' strategy, paired with a trailing stop, has proven effective,” NH Korindo noted in its report on Friday.

As of Sept. 13, 106 bond and sukuk issuances from 64 issuers, totaling Rp 89.69 trillion, have been recorded. The Indonesia Stock Exchange (IDX) now lists 587 bond and sukuk issuances worth Rp 462.16 trillion and $60.12 million. Additionally, 186 series of Government Securities (SBN) and nine Asset-Backed Securities (EBA) are listed, with a total nominal value of Rp 6,182.86 trillion and $502.10 million.

On the global front, US stocks ended the week higher, driven by gains in technology stocks like Microsoft and Broadcom. The S&P 500 rose 0.5 percent, nearing its record high, while the Dow Jones Industrial Average added 297 points. Anticipation of a Federal Reserve rate cut next week also bolstered market sentiment.

Jakarta Composite Index Hits New Record as Market Sentiment Remains Positive

The Jakarta Composite Index (JCI) set a new record over the weekend, rising 0.18 percent to 7,812.131 from its previous high of 7,798.154

jakartaglobe.id

 

[Indos]

Indonesia's Trade Surplus Extends to 52nd Consecutive Month​

The Jakarta Globe

September 17, 2024 | 2:01 pm



Jakarta. Indonesia reported a trade surplus of $2.9 billion for August, marking the 52nd consecutive month of surplus, up from the $2.04 billion surplus in July, the Central Statistics Agency announced on Tuesday.

The trade surplus streak, which began in May 2020, continued despite the August figure being $220 million lower than the same period last year.

Indonesia's exports for August totaled $23.56 billion, a 5.97 percent increase from July and a 7.13 percent rise compared to the same month last year.

In contrast, imports fell by 4.93 percent to $20.67 billion compared to the previous month, though they saw a year-on-year growth of 9.46 percent.

In terms of bilateral trade, Indonesia's largest surplus was with the United States, amounting to $1.7 billion, followed by India with $1.08 billion, and the Philippines with $847.3 million.

However, the country recorded its largest trade deficit with China, at $1.1 billion, along with a $549.7 million deficit with Australia and $312.8 million with Singapore.

For the eight months ending in August, Indonesia's cumulative trade surplus stood at $18.85 billion.

Indonesia's Trade Surplus Extends to 52nd Consecutive Month

Indonesia's largest surplus was with the United States, amounting to $1.7 billion, followed by India with $1.08 billion.

jakartaglobe.id

 

[Indos]

Indonesia parliamentary body approves higher spending for incoming govt​

Updated

Sep 17, 2024, 07:06 PM


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JAKARTA - Indonesia's key parliamentary budget committee approved on Tuesday increased spending for the incoming government of President-elect Prabowo Subianto, who is set to take office next month.

The committee approved a 6% rise in spending to 3,621.31 trillion rupiah ($236.2 billion), versus an estimate of 3,412.2 trillion rupiah in 2024, its chair said.

The budget accommodates key programmes of the new government, including a free meal policy for kids which will cost 71 trillion rupiah, free health check-ups, building hospitals and renovating schools, and food security initiatives.

Prabowo sees these programmes as necessary to help meet his target of lifting economic growth to 8% from 5%.

"The 2025 budget was designed to support an effective government transition," Said Abdullah told a parliamentary meeting.

A wider parliamentary vote scheduled for Thursday, Sept. 19 to approve the committee's decision is still needed, though it usually endorses the decision.

The country's 2025 fiscal deficit was maintained at 2.53% of GDP, smaller than this year's outlook at 2.70%, as revenues are expected to rise by 7.2% to 3,005.1 trillion rupiah next year.

Prabowo aims to increase Indonesia's tax to GDP ratio to 18% from around 10% through the establishment of a specialised body, or state revenue agency.

In his maiden budget, the revenue target from taxes, customs and excises, was set at 2,490.91 trillion rupiah in 2025, 12.3% more than the 2,218.4 trillion rupiah expected to be raised this year.

The revenue target does not factor in a potential value-added tax rate increase to 12% from the current year at 11%, the committee chair said, adding the hike will be discussed again between the state and parliament next year.

BMI, a unit of Fitch Solutions, said in its Sept. 5 report that Prabowo's fiscal targets are too ambitious, saying the deficit forecast might widen to 2.8% or near the legal ceiling at 3% due to potentially higher spending.

The approved budget assumes the economy will grow 5.2% next year, just above 5.1% in the current year's outlook, while inflation is expected to be maintained at 2.5% for 2025.

Prabowo will start his five-year term on Oct. 20. REUTERS

Indonesia parliamentary body approves higher spending for incoming govt

JAKARTA - Indonesia's key parliamentary budget committee approved on Tuesday increased spending for the incoming government of President-elect Prabowo Subianto, who is set to take office next month. Read more at straitstimes.com.

www.straitstimes.com

 

[Indos]

Our Finance Minister cried during last meeting with parliament. New administration will be started in 20 October inshaAllah.

Thank you bu Sri for the service

 

[Indos]

Indonesia's parliament passes Prabowo's maiden budget​

By Reuters
September 19, 2024
11:08 AM GMT+7
Updated 19 min ago

JAKARTA, Sept 19 (Reuters) - Indonesia's parliament on Thursday passed President-elect Prabowo Subianto's maiden budget for 2025, with spending set at 3,621.3 trillion rupiah ($237 billion) and the fiscal deficit projected to be 2.53% of gross domestic product.

The budget assumes economic growth of 5.2%, a small increase from 2024's forecast of 5.1%, and a revenue target of 3,005.1 trillion rupiah.

The budget accommodates key programmes of Prabowo's incoming government, including a free meal policy for children which will cost 71 trillion rupiah, free health check-ups, the building of hospitals and renovating schools, and food security initiatives.

Prabowo will start his five-year term on Oct. 20.
($1 = 15,272 rupiah)

https://www.reuters.com/world/asia-pacific/indonesias-parliament-passes-prabowos-maiden-budget-2024-09-19/

 

[Indos]

BI’s Move Surprises Market, Boosts Rupiah​

Business Today Editorial
-
September 20, 2024

In a surprising decision that defied market expectations, Bank Indonesia (BI) reduced its interest rate by 25 basis points to 6.00%. Governor Perry Warjiyo stated that the “time is right” for this move, emphasising that the decision aligns with inflation remaining within target, a stable and strengthening IDR, and the need to boost economic growth.

The central bank has indicated its expectation that the Federal Reserve will implement three additional rate cuts of 25 basis points each this year, followed by four more cuts next year. BI also anticipates continued strength in the IDR and plans to intervene in the foreign exchange market through spot transactions, Domestic Non-Deliverable Forwards (DNDF), and government bonds. Additionally, BI is monitoring opportunities for further reductions in policy interest rates. Our economist forecasts another 50 basis points cut this year, potentially lowering the rate to 5.50%, and a cumulative 75 basis points reduction next year, targeting 5.00%.

The surprise cut is perceived as a positive signal to the markets, suggesting that BI is gaining confidence in the global macroeconomic environment, which is becoming more supportive of the IDR. Following the announcement, the USDIDR exchange rate remained stable, while the 1-month USDIDR Non-Deliverable Forward (NDF) traded significantly lower.

Prior to this decision, BI had maintained a relatively hawkish stance compared to other Asian central banks, indicating that efforts were focused on strengthening the IDR through the third quarter of 2024. The recent rate cut is expected to bolster support for Indonesian government bonds (GBs), as the central bank appears to be initiating an easing cycle. Following the announcement, both short and long-term yields fell in response to the decision, with strong inflows into Indonesian bonds further supporting the currency.

In the immediate aftermath of the Federal Reserve’s recent decision, the outlook for emerging market currencies, including the IDR, appears mixed. Although the Fed implemented a significant 50 basis point cut, their overall tone was not overtly dovish. The dot plots suggest only an additional 50 basis points of cuts this year, with Fed Chair Jerome Powell cautioning against assumptions of further substantial rate reductions. Despite this, the IDR has emerged as a regional outperformer, with the positive signal from BI countering the Fed’s less dovish approach.

Looking ahead, particularly into October, there is potential for a rebound in the USDIDR as uncertainties surrounding the US elections begin to factor into the market. However, our medium-term outlook for the IDR remains bullish, based on several factors: the commencement of an easing cycle by BI, robust economic fundamentals that support a maintained trade surplus, anticipated inflows into emerging market equities as the Fed eases and growth remains stable, and a manageable fiscal position, with a 2025 forecast of 2.53% of GDP (budget deficit) well below the legal ceiling of 3.00% of GDP. Therefore, we maintain our forecasts, expecting the USDIDR to trend downwards.

BI's Move Surprises Market, Boosts Rupiah

In a surprising decision that defied market expectations, Bank Indonesia (BI) reduced its interest rate by 25 basis points to 6.00%. Governor Perry Warjiyo stated that the "time is right" for this move, emphasising that the decision aligns with inflation remaining within target, a stable and...

www.businesstoday.com.my

 

[Indos]

Bullish bets steady on Asian currencies as Fed easing bets soften dollar, Reuters poll shows​

Story by Sameer Manekar
• 23h • 3 min read




Analysts were long on the Indonesian rupiah for the fourth consecutive iteration of the poll - the longest since May 2023 - underlining the recent appreciation stemming from robust economic fundamentals and growing inflows into emerging markets.

The rupiah has appreciated more than 6% since July and is expected to continue marching on after Bank Indonesia's (BI) surprise rate cut decision to support growth, front-running the Fed.

MSN