Indonesia – December Market Update

Market News |

Indonesia is strengthening its economic resilience by planning a state-backed investment fund, with President Prabowo Subianto targeting $982 billion. The government limited its VAT hike to 12% for luxury goods, while Bank Indonesia held its key rate at 6% to support the rupiah. The Indonesia Investment Authority (INA) is expanding its investment scope to drive economic growth, targeting sectors like food, agriculture, and minerals. In the stock market, December saw minor declines, with the IDX Composite down 0.56%. Meanwhile, corporate activities included LABA’s rights issue plan, GEMS increasing capital for its subsidiary, and KEJU distributing IDR 206.25 billion in bonus shares.

Indonesia economy update

  • Indonesia and India are planning state-backed investment funds to boost economic resilience amid global uncertainties. Indonesian President Prabowo Subianto aims to grow a fund to $982 billion, rivaling major players like the Abu Dhabi Investment Authority.
  • Indonesia has decided to limit its planned VAT increase to 12% exclusively for luxury goods and services, as announced by President Prabowo Subianto. This move aims to address uncertainty regarding which items and services would be affected by the tax hike.
  • Indonesia’s central bank decided to maintain its seven-day reverse repo rate at 6% amid the weakening of the rupiah. This decision aligns with the expectations of over half of economists in a Reuters poll, with 17 out of 31 forecasting no change, while 14 had anticipated a quarter-point rate cut.
  • Indonesia’s sovereign wealth fund, Indonesia Investment Authority (INA), plans to broaden its investment focus to support the nation’s economic growth targets. Under the leadership of President Prabowo Subianto, the government aims for 8% GDP growth by 2028-29. To help achieve this, INA will target key sectors such as food, agriculture, and critical minerals, aligning its investments with the government’s economic priorities, according to INA’s chief investment officer, Stefanus Ade Hadiwidjaja.

Indonesia stock market update

December continued to be challenging for Indonesia’s markets. The IDX Composite saw a slight decline of 0.56%, closing at 7,074.74, while the IDX LQ45 dropped by 3.54%, ending the month at 826.45. Ongoing economic pressures contributed to the losses across both indices.

  • Green Power Group (LABA) plans to raise capital through a rights issue in the first half of 2025, aiming for IDR 100-150 billion. The company is in discussions about the number of shares to be issued. In addition to the rights issue, LABA is expanding strategically by establishing three new subsidiaries and exploring land development
  • PT Golden Energy Mines Tbk (GEMS) has increased the authorized and paid-up capital of its subsidiary, PT Trisula Kencana Sakti (TKS), as of December 20, 2024. TKS, which operates a mine owned by GEMS, now has authorized capital of 900,000 shares worth IDR 450 billion, up from the previous 800,000 shares valued at IDR 400 billion.
  • PT ESSA Industries Indonesia Tbk (ESSA) has established a new subsidiary, PT ESSA Sustainable Indonesia (ESI), which is focused on management consulting activities. ESI has issued and paid-up capital of IDR 10,001,000,000, with ESSA owning 99.9% of the shares, equivalent to IDR 10 billion. 
  • PT Mulia Boga Raya Tbk (KEJU), known for its Prochiz brand, has announced the distribution of bonus shares worth IDR 206.25 billion. The plan, approved at the company’s Extraordinary General Meeting of Shareholders (EGMS), features a 4:11 distribution ratio, meaning shareholders will receive 11 bonus shares for every 4 shares held.

Indonesian top gainer and top loser stocks for December

Summary

Indonesia’s economy remains focused on resilience and growth, with a massive investment fund in development and key policy measures such as selective VAT hikes and stable interest rates. While the stock market faced slight declines, companies pursued capital expansions and strategic investments, supporting long-term economic goals.

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