Kim Jong Un Shake Hands with Donald Trump at Start Summit in Singapore - Photo by Wikipedia

JAKARTA (TheInsiderStories) – The American currency rose to a three-week high on Tuesday (12/06) an Asian stocks edged up on the positive sentiment of a historic meeting between North Korean leader Kim Jong Un and U.S President Donald Trump.

The dollar index rose 0.3 percent against a basket of major currencies. In front of the Japan’s yen, the U.S dollar jumped to a three-week high of 110.49. On the other hand, South Korean stocks rose 0.2 percent,  while Chinese and Australian stock market rose slightly.

Trump and Jong Un meet for their historic talks in Singapore and potentially pave the way to end the deadlock nuclear issue on the Korean peninsula. The both leaders started the meeting by shaking hands and throwing smiles at each other. In a short conversation, Trump said “we will have a great relationship”.

White House Press Secretary Sarah Huckabee Sanders has said said “in the meantime, all sanctions and maximum pressure must remain” if there is no result on the Singapore Summit.

Investors around the world awaits the crucial meetings of Trump – Jong Un. Investors will aware of the talks on North Korea’s nuclear program, meaning the meeting will be closely watched. It is very hard to know what will happen, but it could have profound global implications.

The meeting in Singapore, is intended to detract the Pyongyang‘s nuclear threat. The decision is taken after North Korea detonated explosives to destroy tunnels and buildings at the nuclear site in the country’s remote mountains on May 24, to ensure the transparency discontinuance of nuclear test.

Trump cancelled the summit via a letter released by the White House. The decision came afterNorth Korea violated a series of promises and cut off direct communication with the U.S.

The cancellation coupled with the threat of imposition of a tariff on vehicle imports drove the Wall Street down on May 24. In addition, the cancellation also brings effect to the European capital market with London and Frankfurt exchange dropped by almost 1 per cent.

Trump expect the upcoming meeting in Singapore represents the beginning of a bright new future for North Korea new future for the world and the denuclearization of the Korean Peninsula would usher in a new era of prosperity, security, and peace for all Koreans.
Indonesian Market
Hows about Indonesian market? International rating agency Standard & Poor’s Global Ratings(S&P) stated that Indonesia’s sovereign outlook remains positive despite the negative trend ofglobal volatility market.
Kim Eng Tan, S&P’s senior director for sovereign ratings said the reason is because the rating agency saw a lot of improvement in investment, which gives investors a lot of confident for Indonesian market.
S&P’s finally upgraded Indonesia to investment grade in May last year, sending the rupiah and the stock market soaring, while Fitch raised its ratings for Indonesia a notch above its lowest investment grade in December.
Furthermore, S&P said it does not expect a strong reform drive ahead of 2019 elections, otherwise, the agency expects the ease of monetary policy from Central Bank, which will help rejuvenate private sector’s expansion.
However, S&P warns The Fed’s decision and U.S-China’s trade war are likely to make the global financial market to remain volatile, which may result in suppressing the Asian regional currencies in risk.
S&P also warns the tension on the balance sheets of the Indonesian state-owned enterprises (SOEs), involving in the government-led infrastructure projects. Their balance sheets seem to be more exposed to the next earnings downcycle than in the previous downturn.
If companies continue to raise investments at the current pace, they could be forced to stop all investment in five years to control their finances, renegotiate their debt or ask for recapitalization from the government, Jean added.
The debt that these companies take would also affect ratings of Indonesia’s sovereign debt and the banking system from which they borrow, although at this point it would not negatively affect the government finance.