Jakarta. Indonesia’s main stock gauge extended to a four-day decline on Thursday, plunging to a fresh low in over 14 months amid bearish market sentiments from China.

The Jakarta Composite Index (JCI) declined 0.7 percent to 4,838, losing nearly 3 percent in the past four days alone and totaling to a 7 percent decline since the beginning of the year.

The downward trend was also seen among the index’s regional peers, namely in the Philippines and Singapore.

About 4.8 billion shares, worth around Rp 4 trillion ($300 million), were traded on the Indonesia Stock Exchange (IDX) as losers beat gainers by 177 to 93. Foreign investors, who made up 36 percent of the trading activity, reported a net sell of Rp 483 billion.

Shares in mining and infrastructure took the biggest hits, leading losses of 1.64 percent and 1.34 percent respectively.

The pressure was also felt by Indonesia’s bond and currency market as yield on the government’s ten-year bonds climbed to 8.3514 percent from 8.2602 on the day before, data from the Indonesia Bond Pricing Agency (IBPA) showed.

The rupiah, which has been trading at its lowest level since 1998, fell further against the US dollar to 13,347 from 13,346 on Wednesday, according to data from Bank Indonesia, the central bank.

The currency has lost 7.3 percent since the beginning of the year.

“Both the local and global market contributed to the negative sentiments [on Thursday], but the pressure was greater from the global market,” Andrew Argado, head of research at Recapital Securities, said on Thursday.

“One [issue] is the stock crisis in China a few days ago,” he added.

China’s stocks went into a free-fall on Tuesday, falling by about 30 percent since mid-June, according to reports by Reuters. The bubble triggered a selling spree on commodities and equity markets around the world, including in Indonesia.

On top of the stock crisis, BI governor Agus Martowardojo recently showed concerns about the persistently sluggish growth of China’s economy, which has become the largest destination of Indonesia’s raw commodities export in the past few years.

“We must anticipate [China's slowdown] because China is becoming the center of regional and international economic growth,” Agus said on Wednesday night.

A study by the central bank found that a one-percentage-point decline in China’s economic growth would diminish Indonesia’s expansion by 0.4 to 0.6 percentage points, he said.

GlobeAsia with additional reporting from Reuters

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Jakarta. Indonesia improved in its ranking in happiness, making it the 74th happiest country in the world, but the nation trailed  regional neighbors, according to a recent global ranking in a report on happiness.

Singapore and Malaysia ranked 24th and 61st place, respectively, in the 2015 World Happiness Report, which was released on Thursday by the Sustainable Development Solutions Network — a global initiative for sustainable economic development under the United Nations.

Indonesia — which has the biggest economy in Southeast Asia — moved up two notches from 76th in the 2013 World Happiness Report.

Switzerland topped the list, followed by Iceland and Denmark, as Scandinavian nations continued to dominate the top ten positions in the happiness ranking. Among other Asian giants, China came in at 84th place, while the second most populous country, India, placed 117th.

First launched in 2012, the World Happiness Report is the third annual report that attempts to measure happiness in 158 countries across the world. The report captures average subjective well-being, aiming to provide a global social progress measurement on a dimension broader than just economic growth.

The report uses six variables to quantify happiness include gross domestic product per capita, perception of corruption, healthy life expectancy and perceived freedom to make life choices. The report also measured social support variable by asking whether respondents have someone to count on in times of trouble. The generosity variable, on the other hand, is measured by recent donations.

The report found that “differences in social support, incomes and healthy life expectancy are the three most important factors,” in separating countries’ level of happiness.

“The challenge is to ensure that policies are designed and delivered in ways that enrich the social fabric, and teach the pleasure and power of empathy to current and future generations,” according to the report, which was compiled by economists John Helliwell, Richard Layard and Jeffrey Sach. “When these social factors are well-rooted and readily available, communities and nations are more resilient.”

Still, Indonesia’s government has yet to factor in happiness in its policy-making initiatives, as the nation lags in producing jobs to help  narrow the gap between rich and poor.

“In terms of GDP per capita, there is still a big disparity in income among Indonesians. This is one of the government’s tasks, which means initiating more labor-intensive programs in order to create jobs in the country,” said Aviliani, an economist at the Institute for Development of Economics and Finance (Indef).

“Corruption is also a culture that the government must continue to eradicate in the country.”

GlobeAsia

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Jakarta. The government continues to play down possible adverse effects of the weakening rupiah on the economy, emphasizing instead the positive effects on the country’s export activities in the longer run.

The rupiah fell to its lowest level since 1998 this week, declining by 4.4 percent since the beginning of the year. It strengthened slightly to 12,983 to the  dollar on Friday, data from Bank Indonesia showed. However, the currency remains 4 percent weaker than the government’s macro assumption in this year’s state
budget, which works on an exchange rate of 12,500 to the dollar.

Despite this, Finance Minister Bambang Brodjonegoro said the weaker rupiah would not present much risk of expanding the state budget deficit, since the depreciation was “not by design.”

“Bank Indonesia has conducted an analysis. The effect [of the weak rupiah] would be very small. I have counted it and it was really small,” the minister said on Friday.

He added that the rupiah weakened in line with other currencies in the region as the dollar strengthens in expectation that the US Federal Reserve will start to increase rates by the end of this year.

The projected deficit in this year’s state budget is Rp 245.9 trillion ($19 billion), or 2.21 percent of gross domestic product. By law, the government must maintain the deficit at below 3 percent of GDP.

The deficit widens by Rp 3.5 trillion to Rp 4.2 trillion for every Rp 100 decline against the dollar, according to a calculation by the Finance Ministry.

But Bambang added that the rupiah’s current condition could present favorable opportunities for local industries, such as manufacturing and tourism.

Earlier, Bank Indonesia Governor Agus Martowardjojo also brushed off worries by investors and the public, stressing that the volatility was still largely contained by the central bank.

Bank Indonesia projected the rupiah to trade within a 3 percent to 5 percent range of 12,500 to the dollar this year.

A slight growth in the country’s foreign exchange reserves — typically used by the central bank to contain exchange-rate volatility — further emphasized the bank’s lax stance on the depreciated rupiah, economists said.

Foreign-exchange reserves stood at $115.53 billion last month, up 1.1 percent from $114.25 billion in January, mainly attributed to a surplus in Indonesia’s oil and gas exports.

“Bank Indonesia has noted that it is not intervening to get things back the way they were, but to contain volatility,” David Sumual, head economist at Bank Central Asia, told the Jakarta Globe on Friday. “The stronger dollar is a trend across the region, [so] BI’s stance is not surprising.”

Despite the government’s attempts to reassure the public, businesses remain worried that the condition will persist and drive operational expenses through the roof, which would force them to increase prices. They also warned that investors may lose confidence in the rupiah.

Foreign investors sold government bonds in the past week, driving the yield of 10-year bonds down by more than 30 basis points to 7.3 percent.

GlobeAsia

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Jakarta. Indonesia’s main stock index hit another record high on Friday as investors maintained an upbeat earnings outlook for companies that they believe should brace for surging consumer demand.

The Jakarta Composite Index (JCI) climbed 0.2 percent to 5,400 at the end of the trading week, closing out weekly gains at 0.5 percent.

Around 5.4 billion shares, worth Rp 5.2 trillion ($404.7 million), changed hands on the local bourse, with 150 gainers and 117 decliners.

Foreign investors made up 32 percent of the trading activity, buying Rp 886 billion more shares than they sold. Since the beginning of the year, foreign investors have totaled a net buy of Rp 7.4 trillion.

Analysts attributed the rising appetite toward stocks to investors outlook on companies earnings this year.

The local bourse could climb by up to 20 percent this year, lifted by improving corporate earnings, said Jahanzeb Naseer, the head of research at Credit Suisse Securities Indonesia. The brokerage is most active in the country in term of trading value, handling 5 percent of stocks traded last year.

“We forecast that the index will reach between 6,000 and 6,300 by the end of the year, largely from earnings growth,” Naseer said during a media briefing in Jakarta on Friday.

The JCI climbed by 22 percent last year, which largely consisted of rebounds from losses during 2013’s so-called tapering tantrum, according to Naseer. So far this year, the index has gained 3.3 percent.

“We expect a 15 percent to 16 percent earnings growth this year [in Indonesia]… This will be one of the fastest growth in Asia,” said Naseer.

Some blue chips companies, such as the country largest lender Bank Mandiri, reported slowest earnings growth in years for their 2014 earnings.

This year, telecommunication companies are expected to outperform the index on the back of rising smartphone usage in the country, which should boost earnings from mobile data, Nasser said.

Solusi Tunas Pratama, a tower operator under investment,  has climbed 14 percent so far this year, while state-controlled Telekomunikasi Indonesia, the country’s largest telecommunication company, rose 0.9 percent

Stocks in the automotive and the property sectors will increase as consumer demand for transportation and housing remains robust amid a looser interest rate environment, Naseer said.

“With interest rates coming down, 2015 is going to be a year where we’re forecasting more demand than supply [in property], so prices will do well,” said Naseer, alluding to the central bank’s recent policy rate cut.

Bank Indonesia lowered its policy rate by 25 basis points to 7.5 percent on Tuesday amid easing inflationary pressures.

Naseer added that banks are starting to offer promotional packages on mortgages, seeing the potential demand for home loans.

GlobeAsia & Investor Daily

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Jakarta. Tesla’s Model S, a line of premium electric cars from Palo Alto-based Tesla Motors, officially made its way to Indonesia on Friday, marking the brand’s entrance into Southeast Asia.

Launched three years ago in the United States, Tesla’s Model S will be available in Indonesia through Jakarta-based premium car dealership Prestige Motorcars.

“We believe Indonesia is ready for a high-technology car,” Rudy Salim, the president director of Prestige Motorcars, said in Jakarta on Friday.

“The demand for premium cars here is still high, and the [Tesla Model S] provides an alternative for people seeking an environmentally friendlier option.”

Rudy added that the electric car, which can travel up to 400 kilometers on a single charge, would be sold in Indonesia for between $140,000 and $190,000, double the manufacturer’s suggested retail price in the United States.

“We’ll also install a charging station in the buyers’ home,” Rudy added.

The cars will not be readily available at the dealership, he conceded, but will be imported with each customized order. The first batch of deliveries are scheduled for April.

The dealership started taking orders on Friday and has already seen requests coming from Jakarta and Surabaya.

Prestige Motorcars is, so far, the only car dealerships in Southeast Asia to offer the Tesla Model S, the brainchild of engineer and entrepreneur Elon Musk. The 43-year-old is also chief executive of Tesla Motors and space technology company SpaceX.

Tesla Motors made its first official foray into the Southeast Asian market by opening a branch office in Singapore in 2010 and offering the Tesla Roadster. However, the lack of a green technology tax break and subsidies from the government forced the company close up shop 10 months later, according to a report from AutoEvolution.

Despite its popularity in the United States, the brand has experienced trouble gaining traction on the global stage. Last year’s sales figures for China, where Tesla  set up a branch in 2013, was weaker than previously expected, reportedly triggering a tirade from Musk threatening to fire top executives in the country.

Nevertheless, Prestige Motorcars’ Rudy said he was confident that Indonesians would embrace the brand.

“The [sales] decline in China was due to the country’s slowing economy, not a lack of interest. In Hong Kong, for example, demand is high. It will be similar in Indonesia,” he said.

Tesla’s Model S will compete with other premium car brands that have already made their mark on the local market, including Italy’s Ferrari and Germany’s Mercedes-Benz.

The former has sold 473 units in Indonesia so far, according to Ferrari Indonesia chief executive Arie Christopher. The Italian brand now sells an average of  40 cars per year here.

GlobeAsia

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