Tuesday, 23 September 2014


After the Legislative and  Presidential Election 2014, stockmarket Players, bank custodians and emitents on the occasion of Halal Bihalal socializing were conducting a workshop and SRO under the theme of “Economic Outlook in the Post Election 2014”. Acting as speaker was President of BEI Ito Warsito, Economic Observer Faisal Basri, President of PT Bank Mandiri Tbk Budi Gunadi Sadikin and Deputy Commissioner of Stockmarket II of OJK M Noor Rachman.

The Democratic Feast in Indonesia run in 2014 apparently had its impact on economy, while fluctuative Rupiah had its extra negative sentiment on national economy. Previously after the General Election IHSG curveline was rated as in positive condition.

Such was on account of Indonesia’s strong fundamental economy. The constant weakening of Rupiah value against USD since 2013 had arrived at crucial level in Indonesia’s troubled economy. This condition was expected to change with the next Government being in office.

“Today’s economic situation is notably grave as Rupiah exchange rate against USD is helplessly weak” President of BEI Ito Warsito stated at the Halal Bihalal occasion at the Hotel Ritz Carlton Pacific Place in Jakarta on Monday [18/8].

Ito expected the next Government would lead national economy to be a better position among others by maintaining social and political stability at home: thereby investors would feel more comfortable in investing in Indonesia. Security factor was important to investors beside incentive. “Investors would naturally come to where profit is” Ito said.

He Further disclosed that foreign investment in shares was posted at Rp. 55.5 trillion till August 15 including promissory notes came to more than Rp. 100 trillion. The amount was record and higher than last year. This was high achievement considering that in 2013 investment from shares was minus Rp. 20.6 trillion.

Ito predicted that this positive sentiment would continue to prevail till end of year when the new president was installed, on condition that sound strategy was already at hand. Positive sentiment would prevail if the next Government could create a favorable climate for investment. Security was the prerequirement. “Money is like water. The difference is that money flows to where good prospect is” Ito said.

Economist Faisal Basri stated that the next Government must have the courage to make a breakthrough. For example to minimize the number of free riders i.e. vested interest who had been gnawing on national economy. “They must be exterminated.”

Accordingly, Faisal said, inter-institutional coordination in all sectors must be fostered so decision making could be made faster. He felt sure that. “Whoever the President, Indonesia must stay on the right track and stick to all the commitment made” Faisal said.

Meanwhile the President of PT Bank Mandiri Tbk Budi Gunadi Sadikin was still optimistic about the condition of the banking sector today. Index of IHSG and the banking sector was today still strong. “IHSG index is in good shape and unaffected by election.” Budi said.

Budi said that although Indonesia’s economy had been hampered by crisis many time before and under heavy pressure in 2013, things were severe enough to put Indonesia in adverse condition.

“There were crisis data in 2002, 2005, 2008, and 2009 and 2013 things were getting better. In 2008 Rupiah was above Rp13,000 per USD now it was below Rp. 12,000. In 2008 2 banks fell, in 2013 no bank fell. After the election the capital market was good”

Budi also reminded that national banks were expected to consolidate to face the Asean Free Market of the banking sector in 2020. Consolidation of the banking sector in Indonesia was way behind that of other countries: banks strengthen capital to be competitive.

Budi stated that the condition of bank’s liquidity in Indonesia today was different from that of 15 years ago. Today and for the next 10 years the condition of bank’s liquidity would still be tight; capital injection was needed whereby to develop. “Indonesia is a country with 16th biggest economy in the world, or population is high. But why bank’s liquidity is so low?” Budi asked.

At the same place the Deputy commissioner of Stockmarket II of OJK M Noor Rachman stated that the stockmarket in Indonesia today still had homework to do. One of them was to increase the number or emitents at the stockmarket. “The number of emitents listed at the stockmarket today was less than 500, much less compared to that in neighboring countries. We need to work shoulder to promote investment and enhance good corporate governance.”

Budi further stated that supposedly the industry keep developing instruments of the capital market like promissory notes and e-reporting for emitens. It was also necessary to reform regulations like matters related to extraordinary meeting of shareholders [RUPS] material transactions, and public offerings. “thereby our stockmarket could be expected to develop” he said. 

He rated that execution of the General Election 2014 which was orderly had its positive impact on the national stockmarket. Still Rachman said, homework must be done by OJK. (SS)

Business News - August 22, 2014 

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