Indonesian Capital Market ( Jakarta Composite Index )

a. History

Jakarta Stock Exchange (JSX) or in Indonesian Bursa Efek Jakarta (BEJ) was a stock exchange based in Jakarta, Indonesia, before it merged with the Surabaya Stock Exchange to form the Indonesian Stock Exchange. Originally opened in 1912 under the Dutch colonial government, it was re-opened in 1977 after several closures during World War I and World War II. After being reopened in 1977, the exchange was under the management of the newly created Capital Market Supervisory Agency (Badan Pengawas Pasar Modal, or Bapepam), which answered to the Ministry of Finance. Trading activity and market capitalization grew alongside the development of Indonesia's financial markets and private sector – highlighted by a major bull run in 1990. On July 13, 1992, the exchange was privatized under the ownership of Jakarta Exchange Inc. As a result, the functions of Bapepam changed to become the Capital Market Supervisory Agency. On March 22, 1995 JSX launched the Jakarta Automated Trading System (JATS). In September 2007, Jakarta Stock Exchange and Surabaya Stock Exchange merged and named Indonesian Stock Exchange by Indonesian Minister of Finance. (www.wikipedia.com)

b. Recent Performance

Indonesia’s rupiah retreated from a seven-year high as the central bank kept its key lending rate unchanged for a second month today. Benchmark bonds declined.

Bank Indonesia kept its benchmark reference rate at 6.75 percent, it said in Jakarta today, a decision predicted by all 18 economists surveyed by Bloomberg News after inflation slowed for a second month in March. Consumer prices rose 6.65 percent last month from a year earlier, compared with an increase of 6.84 percent in February, according to official data released April 1. Core inflation, which excludes food and fuel, accelerated to 4.45 percent from 4.36 percent.
The rupiah fell 0.1 percent to 8,663 per dollar as of 5:17 p.m. in Jakarta, according to data compiled by Bloomberg. The currency touched 8,637 yesterday, the strongest level since April 28, 2004.

The currency’s appreciation may continue this year, Bank Indonesia Governor Darmin Nasution told reporters in Jakarta today. Still, the central bank wants to ensure the currency won’t strengthen too fast, Deputy Governor Hartadi Sarwono said at the same briefing. (http://www.bloomberg.com/news/2011-04-12/rupiah-declines-on-speculation-central-bank-may-hold-key-rate.html)