Indonesia – November Market Update

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Indonesia’s economy grew by 4.95% in Q3 2024, falling short of expectations and highlighting weak domestic consumption as a key challenge. The central bank maintained its policy rate in November, prioritizing rupiah stability over potential rate cuts. President Prabowo Subianto continued efforts to attract foreign investment, securing $10 billion in agreements with China for green energy and technology. Additionally, during a summit with U.S. President Joe Biden, Prabowo emphasized strengthening bilateral relations and increasing U.S. investments in infrastructure, renewable energy, and digital technology.

Indonesia economy update

  • Indonesia’s economy grew by 4.95% in Q3 2024, missing expectations and signalling a slowdown. Weak domestic consumption presents a challenge for the government’s ambitious 8% growth target under Prabowo’s leadership. Analysts believe it will be difficult to achieve this goal without significant improvements in consumer spending and investment in the coming months.
  • Indonesia’s central bank decided to keep its policy rates steady in November 2024, prioritizing the stability of the rupiah over potential rate cuts. The bank remains cautious about inflation and the rupiah’s exchange rate amid global economic uncertainty. Despite a slow growth outlook, the central bank’s focus is on maintaining financial stability, while providing some support to the economy.
  • Indonesian President Prabowo Subianto met with U.S. President Joe Biden during a summit, emphasizing his government’s commitment to strengthening bilateral relations. He encouraged U.S. companies to invest in Indonesia’s priority sectors, including infrastructure, renewable energy, and digital technology, aligning with his economic development vision.
  • Indonesia and China have finalized $10 billion in agreements focused on green energy and technology. The deals emphasize renewable energy initiatives and advancements in technology sectors, strengthening economic collaboration. During a meeting with Chinese President Xi Jinping, Indonesian President Prabowo Subianto reaffirmed his commitment to maintaining close ties with Beijing. This partnership aligns with Indonesia’s goals of attracting investments to support its sustainable development and technological innovation priorities.

Indonesia stock market update

November was a tough month for Indonesia’s markets. The IDX Composite saw a decline of 6.07%, closing at 7,114.27, while the IDX LQ45 dropped by 7.01%, ending the month at 856.78. Both indices faced significant losses amid ongoing economic pressures.

  • Shares of PT Bayan Resources Tbk (BYAN), one of Indonesia’s major coal producers, saw a significant market cap increase of 13.80% in November 2024. This growth is attributed to strong coal prices, positive earnings reports, and increased investor confidence in the company’s long-term contracts and operational efficiency.
  • Unilever Indonesia Tbk PT (UNVR) has announced plans to transfer its ice cream business to another subsidiary for IDR 7 trillion. This strategic move is part of Unilever’s efforts to streamline its operations and focus on core business areas with higher growth potential.
  • The auction of Government Sharia Securities (SBSN), or government sukuk, held on November 19, 2024, recorded bids totalling IDR 13.85 trillion. Seven series of state sukuk were offered, consisting of two SPNS (State Treasury Letters – Sharia) series and five PBS (Project-Based Sukuk) series.
  • Vale Indonesia Tbk PT (INCO) has partnered with GEM Co Ltd, a Chinese company based in Beijing, to advance net-zero nickel production in Central Sulawesi. The agreement was finalized during a bilateral business meeting between Indonesia and China, attended by Indonesian President Prabowo Subianto.

Indonesian top gainer and top loser stocks for November

Summary

Indonesia’s stock market faced a difficult November, with the IDX Composite falling 6.07% and the IDX LQ45 dropping 7.01%. Despite the downturn, PT Bayan Resources Tbk saw a 13.8% market cap increase due to strong coal prices and investor confidence. Unilever Indonesia announced a strategic restructuring of its ice cream business, valued at IDR 7 trillion. The government’s latest sukuk auction attracted IDR 13.85 trillion in bids, highlighting sustained investor interest in Islamic finance. Meanwhile, Vale Indonesia partnered with China’s GEM Co Ltd to drive net-zero nickel production, reinforcing Indonesia’s focus on sustainable industrial growth.

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