Weekly Briefing: Asian Games Ceremony Gives Diversion For Indonesians

President Joko Widodo Open Asian Games 2018 with Surprised Action - Photo by President Office

JAKARTA (TheInsiderStories) – Good Morning. The 18th Asian Games in Jakarta opened with a lavish ceremony and great fanfare on Saturday (18/08), providing ordinary Indonesians with a much needed diversion amid the endless cycle of economic and political news.

There’s a reason to celebrate too. Taekwondo athlete Defia Rosmaniar become the first to win gold medal for Indonesia in the Asian Games 2018. Xavier Edgar Marvelo won silver medal for Indonesia from Wushu.

However, the distraction will be short-lived. The public’s attention will be fixated on the development in Lombok, a popular tourist destination which had been hit by a series of strong earthquake. The latest earthquake hit on Sunday (19/08) as Lombok residents were still reeling from the previous attack which had caused at least 460 deaths.

On politics, the opposition camp is relatively muted in their response to the recently-announced 2019 proposed State budget by the government, which planned to spend more yet still aimed for lower deficit.

From other side, the ruling coalition is set to announce the leader for the campaign team of the 2019 Presidential Election, with three people are considered favorites. The ruling coalition supports President Joko Widodo and popular cleric Mar’uf Amin as number two.

Moving to the economy, the surge in car sales could provide a hint that economy is gaining traction. The Car Manufacturers Association announced that car sales reached a record high of 107,432 units in July, putting the figure for the first seven months at 661,093 units.

There are another good news from the property market. The Financial Services Authority has eased a norm on banks’ risk-weighted assets for property credit, complementing previous relaxation by Bank Indonesia which allows zero down payment for first time house buyers.

Domestic financial market is subdued as foreign investors are risk-averse amid escalating trade war between developed economies and monetary policy tightening by key central banks.

The Jakarta Composite Index fell 4.8 per cent over the week (August 13-16) with foreign investors pulled out Rp2.5 trillion from the equity market. Sentiments from the ongoing financial crisis in Turkey continued to weigh down appetite for emerging market assets. The nation gets a lifeline with a US$15 billion investment commitment from Qatar.

Market participants will monitor the meeting between US and China trade officials on Wednesday and Thursday and look for clues on whether there will be a solution for the ongoing tit-for-tat tariff policy between the world’s two largest economies.

Foreign investors, however, are expected to remain risk-averse and awaiting for the release of the minutes of meeting of the Federal Reserves Open Market Committee on Wednesday (22/08). Another key event is the Jackson Hole meeting, which will see the attendance from the world’s leading central bankers and economist, including US’ Federal Reserves Chair Jerome Powell.

Hope you have a profitable day.

TIS Intelligence Team, Email: theinsiderstories@gmail.com