Sign up | Log in



Home  >>   Daily News  >>   Indonesia  >>Investment  >> Selling spree continues on yuan devaluation
NEW UPDATES Asean Affairs  14 August 2015  

Selling spree continues on yuan devaluation

Investors pulled out a total of Rp 1.35 trillion (US$98.34 million) from the stock market while the Jakarta Composite Index (JCI) lost nearly 6 percent of its value in just two days after China devalued its currency — a move which could hurt exports across the region.

Foreign investors, according to the Indonesian Stock Exchange (IDX) data, made net sells of Rp 763.77 billion on Wednesday, extending the Rp 584.6-billion sales they made in the previous day.

As the prices of traditionally foreign-loaded shares — which include the country’s top-four lenders, diversified conglomerate Astra International Indonesia as well as consumer giant Unilever Indonesia — ended as the day’s top laggards, the JCI fell sharply.

The JCI to slip by 3.1 percent to 4,479.5, a level not seen since February 2014. The steep decline occurred after the index fell by 2.67 percent on Tuesday.

With a heavy outflow from the stock market since early July, total foreign net buys for the year so far stand at only Rp 1.5 trillion — or 10 percent of its peak of more than Rp 15 trillion earlier this year.

The stock market recorded foreign net sales amounting to Rp 2.69 trillion in the seven consecutive days until Wednesday, initially prompted by gloomy first-half economic updates announced earlier in the month.

The move by China — Indonesia’s biggest trading partner — to lower its pegged currency exacerbated the selling spree in the domestic stock market, analysts say.

The yuan was set for its biggest two-day drop since 1994 after China’s central bank cut its reference by 1.9 percent on Tuesday to keep exports competitive, Bloomberg reported, and on Wednesday it headed for another 1 percent drop.

“There are of course concerns that the devaluation might hurt Indonesian exports. On top of that, however, investors are panicking because they are not used to seeing an unpegged yuan,” Universal Broker head of research Satrio Utomo said.

China’s central bank, the People’s Bank of China, had safeguarded the yuan against the dollar since March to encourage global usage in a push for official reserve status at the International Monetary Fund, but a strong yuan had put pressure on China’s exports, which fell 8.3 percent from a year earlier in dollar terms in July.

The devaluation sent shockwaves across Asian markets, with most stock benchmarks ending lower by more than 1 percent on Wednesday, on fears that the move would curtail Chinese imports.

Satrio emphasized that the devaluation should not be interpreted as the yuan depreciating against the US dollar, saying that there were always highs and lows in a free market.

Given the current bearish trend, which might extend into next week, he said, the government and stock market regulators needed to intervene to prevent further slumps.

“There is every possibility for the stock market to see further selling and to book yearly foreign net sales. The government should have called listed state-run companies to buy back their shares to revive investment appetite, just like in previous years, but so far I have yet to see relevant ministries show concern about what’s happening on the stock market”.

While Satrio said the yuan played the biggest part in dragging down the index on Wednesday, domestic events — including the Cabinet reshuffle — partly contributed to the crash, Lanjar Nafi from Reliance Securities said that investors were looking after their investments ahead of the Cabinet reshuffle announcement.

“The rupiah hit another 18-year low and investors are concerned about the reshuffle, thus making the JCI the worst performer in the region,” he said in a note.

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below

Today's  Stories                           August  14 , 2015 Subsribe Now !
• U.S. Companies Engage Thai Government, Encourage Pro-Business Policies  Subcribe: Asean Affairs Global Magazine
• Thai bourse market report for July 2015
• Selling spree continues on yuan devaluation
Research Reports
on Thailand 2007-2008

• Textiles and Garments Industry
• Coffee industry
• Leather and footwear industry
• Shrimp industry

• Tourist arrivals in first half rise
• Vinachem signs EPC contract for US$450 million salt mine 
Asean Analysis                   August 14, 2015
• Asean Analysis August 14, 2015
Aung San Suu Kyi & Her Party Face Challenges Despite Opportunities of Myanmar’s Elections
Advertise Your Brand

Asean Stock Watch  August  14,   2015
• Asean Stock Watch-August 14, 2015
The Biweekly Update
• The Biweekly Update July 24, 2015

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent
• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore • Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline • Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

| Terms of Use | Site Map | Privacy Policy  | DISCLAIMER |

Version 5.0
Copyright © 2006-2020 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand