JAKARTA (TheInsiderStories) – After recorded a weak investment realization, the Investment Coordinating Board proposed to the Minister of Finance and Minister of National Development Planning to slashed this year investment target from Rp765 trillion (US$51 billion) to Rp730 trillion.
The head of the investment board, Thomas Lembong said, this change was based on evaluations in the last two quarters that continued to decline. In the second quarter of 2018 the realization investment dropped significantly from Rp185.3 trillion to Rp176.3 trillion. The decline occurred again in the third quarter (3Q) the investment realization was only able to penetrate to Rp173.8 trillion.
Indonesia’s investment realization in 3Q decreased by 1.6 percent to 173.8 trillion, caused by foreign investment. Lembong said, the exchange rate fluctuations triggered by Federal Reserves rate increase, US Dollar invigoration, also United States-China trade war
, made investors delayed their investment plans.
Otherwise, domestic investment still recorded growth by 4.32 percent to 535.4 trillion Rupiah. Although the investment
rate has slowly declined, he remains optimistic that the government’s initial target to withdraw funds in this sector can be achieved.
Separately, Finance Minister Sri Mulyani Indrawati promised to support increased investment through various fiscal incentives
like tax holiday and tax allowances. She believed through this policies the investment commitments to reach more than Rp160 trillion.
Go to the financial market, the government has raised Rp20 trillion from the the seven series of state securities. Government securities auction on Oct. 23rd, obtained Rp47.5 trillion offering. The securities offered were new issuance of SPN03190124, also reopening of SPN12190704, FR0077, FR0078, FR0065, FR0075, and FR0076.
Yields assigned vary, from 5.86 percent for SPN03190124, 6.2 percent for SPN12190704, 8.61 percent for FR0077, 8.72 percent for FR0078, 8.95 percent for FR0065, 9.1 percent for FR0075, and 9.36 percent for FR0076. Maturity of these ranged from January 2019 to May 2048.
While Rupiah wilted and fell to its lowest since 1998 economic crisis. On Tuesday (30/10), the Rupiah
in the spot market showed a very slight correction of 0.01 percent to the level of 15,224 per US dollar. The local currency also fell 0.12 percent to 15,237 per US dollar, based on Jakarta Interbank Spot Dollar data.
The strengthening of the US dollar was triggered by the statement of US President Donald Trump who would charge additional import costs back to $257 imported products from China. Trump threatens to impose this new tariff if the meeting with Chinese President Xi Jinping in November does not has a result.
On the other hand, Italy’s 2019 budget is not approved by the European Union, causing political turmoil that is returning to warmth so that it again pushes the dollar index. However, the release of data on future Chinese manufacturing is considered to be able to withstand the weakening of the rupiah again.
On the contrary, the Composite Stock Price Index
, closed in green territory. It rose 0.59 percent to 5,789.1. Foreign net buy was getting better at Rp599.18 billion Rupiah, compared to previous days. Foreign investors also recorded net purchases of Rp599.14 billion.
The stimulator for today’s trading maybe come from the 2019’s State Budget. Government and House of Representatives’ budget agency have agreed on the macro-assumption and development target in the draft.
State revenue is targeted at Rp2,165.1 trillion, mostly from tax and customs. While State expenditure is Rp2,461.1 trillion with more than half for regions and villages funding.
May you have a profitable day!
Written by Linda Silaen and TIS Intelligence Team, Please visit our new website to get more insight on Indonesia’s economy: www.tisintel.com