JAKARTA (TheInsiderStories) — Discussions about British exit or Brexit withdrawal from the European Union (EU) will continue to be a hot topic ahead of the upcoming decision on Dec. 11. Such an event may affect economic conditions in Indonesia.

The Prime Minister Theresa May expects parliament to approve the agreement she has made to maintain good relations with the EU, after official leaving in March 2019.

But oppositions have been trying to thwart the agreement. On the first day of Brexit discussion, on Dec. 6, May administration found dishonourable resistance from the parliament.

Analysts rated, the ongoing tension between the executive and legislative bodies of Britain can certainly have a negative impact on the Jakarta Composite Index, as it isn’t immune to global turmoil. The negative impact, if any, is predicted to not last too long.

Stock markets tends to make gains due to window dressing season at the end of the year. Yesterday, at the market close, the Jakarta Composite Index closed down by 0.28 percent to 6,115.49.

In addition to the weaker stock price index, the Rupiah exchange rate also slumped 0.87 percent to the level of 14,507 against US Dollar. Nanang Hendarsah, Bank Indonesia (BI) Executive Director of Monetary Management Department said, the decline of Rupiah exchange rate was in line with other countries.

According to him, there is also risk triggered by the lack of clarity in the US-China trade truce and increasing concerns over a global recession.

While, the Organisation of Petroleum Exporting Countries (OPEC) has ended talks in Vienna without a deal on oil production cuts. That left the oil market dangling in uncertainty before non-OPEC allies joined a second day of talks.

OPEC’ plan to cut crude oil production to prop up the weakening price may fail, if Russia,—a non-OPEC member oil exporter—does not agree to the changes. OPEC proposes to cut crude oil production by 1 million barrels per day, assuming Russia contributes 150,000 barrels cut per day.

But if Russia agrees to cut 250,000 barrels per day, the total overall cut can be 1.3 million barrels per day. Russian officials are still in discussions over the issue.

Moscow will state its decision today. Russia officials have previously warned that it won’t be easy to cut oil production during winter. On the other hand, the Unites States disagrees with the production cut, and the desire for low oil prices.

Then, BI’s consumer survey indicated increasing optimism in November compared with the previous month. Consumer Confidence Index in November rose 122.7 from 119.2 in October. The index ascent was supported by an improvement in consumer perception of the recent economic condition and future estimates.

Furthermore, the Ministry of Finance will disburse Rp5.2 trillion (US$358.62 million) fund for the Health Social Security Organising Agency, following the first Rp4.9 trillion disbursement in last September. The funding will be used to pay the agency’ claim, as it has huge amount of deficit. This is the second aid this year,

In September, the body arrears had reached Rp7.05 trillion. Financial and Development Supervisory Agency calculated that total assistance for health insurance will be around Rp10.1 trillion in this year.

While, PT Rimo International Lestari Tbk (IDX: RIMO) shareholders have agreed upon the company’s Rp642.41 billion-worth of capital increase without private placement, Thursday. RIMO, a once retail company has changed to focus on property.

They will issue 4.14 billion new shares, equal to 10 percent company’s shares. Each share tagged Rp155, lower than company’s share price that closed at Rp162 a share.

Funding pocketed from the private placement will be used to pay off several debts, Rp159 billion to its unit PT Mulia Manunggal Karsa. The six percent interest rate loan will be due on December 2018.

Rimo International will also settle Rp480.81 billion loan to one of it’s major shareholders, Benny Tjokrosaputro. The private placement aims to lower company’s debt to equity ratio.

May you have a profitable day!
US$1: Rp14,500
Written by Linda Silaen and TIS Intelligence Team, Please visit our new website to get more insight on Indonesia’s economy: www.tisintel.com
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The Insider Stories Founder Linda Silaen has a solid, proven history, established over more than a decade as a journalist with a leading internasional news organization, of being the first with the biggest economic news stories in Indonesia. Specializing in corporate news, Linda is also a veteran of some of the biggest macroeconomic and general news stories as Indonesia rapidly transforms into a major market economy. One of the founders of the original blog from which this company developed, Linda’s knowledge of investors’ information communications and data us developed from unrivaled networking skills that make her a well-known name among CEOs, bankers, government officials and private equity investors both in Indonesia and other countries.

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