Most Asian stock markets, Indonesia, Australia, New Zealand, Hong Kong, and Singapore have no transactions today - Photo by The StraitTimes

JAKARTA (TheInsiderStories) – After global major indices slumped in the beginning of the week, the governments created various economic stimulus to helped their economy. The spread of coronavirus has affected hundreds of countries and thousands of people.

In Indonesia, the government spokesperson, Achmad Yurianto, announced a total of 27 cases has been affected the citizens. While, globally, total cases reached 119,177 and 4,295 deaths. A number of countries have reported their first corona cases, such as Panama, Burkina Faso, Faroe Islands, Cameroon, Cyprus and Morocco.

The increasingly massive coronavirus outbreak makes the governments pour out fiscal, monetary and other stimulus. Latest, Indonesia Stock Exchange (IDX) to stop temporarily trading for 30 minutes if the Jakarta Composited Index (JCI) fell by 5 percent and half hour further when the stock index down 10 percent, said the regulator yesterday (03/10).

The local bourse will suspended the trading if the JCI has decreased more than 15 percent until the end of the trading session or more than one trading session after obtaining approval or order from the Financial Services Authority. These provisions will be effective starting March 11, 2020 until the deadline to be determined later, said the IDX.

It said, the temporary stop or halting is carried out among others to maintain the sustainability of the market so that it remains conducive and anticipates panic. While, finance minister, Sri Mulyani Indrawati claimed, Indonesian government is preparing stimulus similar to the 2008 global financial crisis, including buying back government bonds and halting income tax for individuals and corporations to curb the domestic economy.

The policy taken to restore confidence in the financial markets and soften the economic impacts of COVID-19 and oil price war. She said, the new incentives are income tax 21 (PPh 21, PPh 22 and PPh 25) and the acceleration of value added tax restitution. The coordination meeting on the new stimulus will held today led by coordinating minister for economic affairs, Airlangga Hartarto.

Globaly, major stock market bounced back on Tuesday, on anticipation that the White House could get a stimulus package after the meeting United States (US) President Donald Trump with Republican. But the wild cards still exist as to whether Congress will go along with his payroll tax reduction and whether paid sick leave will also come about.

While, Australia unveiled a A$2.40 billion ($1.56 billion) health package to combats the spread of the coronavirus, said Prime Minister Scott Morrison. The country has also extended its travel ban for Italy, after reported expanded a lockdown to cover the entire country contain by the virus.

In addition, Reserve Bank of Australia’ deputy governor, Guy Debelle said, the central bank would consider unconventional policy should interest rates be cut by a further quarter point to an effective floor of 0.25 percent. The Bank has already slashed rates by 100 basis points since last June to a record low 0.5 percent.

In its latest report, Citi says, the global economic growth will be cut because of sluggishness in the tourism sector. If tourist expenditure decreases by 10 percent, the world economic growth this year will only be 2.34 percent.

Furthermore, if tourist spending decreases to 30 percent, then global economic growth is estimated to be only 2 percent. Even worse, if tourist spending drops 100 percent, then global economic growth will be only 0.78 percent.

To reduce these impact, Citi noted, the whole world are waiting for governments action through the economic stimulus. Confidence in the stimulus makes investors dare to play aggressively, said the research company.

US$1: AUS$1.54

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