Morning Briefing: Indonesia performs above expectation in Asian Games

President Joko Widodo handed over the gold medal to Defia Rosmaniar, the first Indonesian gold Taekwondo athlete at the 2018 Asian Games some time ago - Photo by President Office

JAKARTA (TheInsiderStories) – Good Morning. The mood of the public-at-large is largely positive as Indonesia keeps on raking gold medals from the 18th Asian Games held in Jakarta and Palembang. As of Monday (27/08), Indonesian athletes had won 22 gold medals, 15 silver and 27 bronze and ranked fourth in the medal tally.

That was above the official goal of 20 gold medals and also the previous record of 11 gold medals in 1962 Asian Games, also held in Jakarta.

The celebration, however, might be short-lived as Indonesian athletes got most of the gold medals from games that are never included in Olympic or even previous Asian Games. Such is the privilege of being a host nation, allowing Indonesia to determine the three sport branches that can compete in the sporting event.

One such game is Indonesia’s martial arts, Pencak Silat, which contributed 8 gold medals in its debut in the Asian Games. The Indonesian government has for years lobbied for the inclusion of Pencak Silat to be included in Asian Games or even the Olympic, putting it on par with other martial arts like Taekwondo or Karate.

The victories in Pencak Silat may also have a political twist, given that its association is headed by Prabowo Subianto, the opposition’s presidential candidate. So far, however, reactions from the opposition camp in claiming the victories were rather muted and measured.

Meanwhile, The Indonesia Stock Exchange kicked off the annual investors summit, where several listed companies holds simultaneous public expose. Two banks took the stage today, the largest private lender PT Bank Central Asia Tbk (IDX: BBCA) and mortgage-focus PT Bank Tabungan Negara Tbk (IDX: BBTN).

In its expose, BBCA’s management said a 25 bps rate hike in deposit and lending rates will be executed by the end of the year. This hike is in line with Bank Indonesia’s (BI) move to tighten monetary policy and will impact the momentum in credit growth, one of key indicators of economic activities.

BBTN, on the other hand, will not take advantage on the BI’s policy relaxation to allow zero down payment for first-time home buyers. As the largest mortgage provider in Indonesia, the bank’s reluctance shows that the policy relaxation may find difficulties to gain traction, given that interest rates are rising in Indonesian and elsewhere in the world.

Moving to overseas, the United States (US) and Mexico government are close to sign a new trade deal, which President Donald Trump declared as ‘a big day for trade’. However, Trump insisted that the trade deal will not be a new North American Free Trade Agreement, which the controversial businessman seeks to terminate since taking office.

While there are details to be meted out, the deal could send a signal that Trump is wiling to reach a compromise with regards to trade issues. This is a positive development for market participants, who are nervous with the escalation tit-for-tat trade tariffs between the US, China and the European Union.

Financial market ended in the green on Monday, driven by sentiments from US Federal Reserves chair Jerome Powell, who delivered a statement perceived as dovish in the annual Jackson Hole meeting last week.

The rupiah strengthened to 14,610 per US$1 from 14,655, while the Jakarta Composite Index was up 1 per cent at 6,026.

Hope you have a profitable day.

TIS Intelligence Team, Email: