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Indonesia Q3 2014 Review

I finally decided to write again, after my last post. News have been very mixed lately, the inauguration of Joko Widodo, Indonesian 7th president was very fascinating. Many contributed in many ways, and all people from all walks of life came down to bunderan HI to see the new president.
Jokowi after his inauguration
This is a rare sight in Indonesia, where everybody join in together to contribute to politics. Congratulation Mr. Joko Widodo, you have made Indonesia whole again, your people have high hopes on you.
In other news, finally, after long awaited moment, despite the fact that the Central Statistic Agency of Indonesia have not released the data yet, investing.com have kindly alerted me on Indonesian GDP Q3 result, split by QoQ and YoY. Below is the snapshot of it.
The world economy slowdown have affected much of the emerging market, and Indonesia is one of them. Another good news from abroad is the fact that QE in the U.S. no longer exist, thus the economy run on its own now, people lend money to the banks and banks give lending to the people. The USD is stronger to IDR for the past couple of weeks, and IDR is only getting weaker by the moment.

According to bisnis.com, during the Q3, export is experience a shortfall compare to the same period last year by 0.43%. The Indonesian economic will be even slower after the government cuts the fuel subsidy, which will make the price of the fuel to be around IDR 9,500 - 10,500 compare to before IDR 6,500. This will create a higher inflation in the economy due to an increase in prices, especially consumer goods. This will have affect on people's behavior with money, and it will take time for the people to be accustomed with the higher price. This will also decrease the CPI of Indonesia in the short run, and will eventually increase in the long run.
The overall performance of the composite index have been rather diminished, and a double top is forming on the below chart. A potential lower move for the next couple of days for the JCI.
Current resistance line for the double top is on IDR 5,103, and the support is in IDR 5,003. If the price breaks the support line, the next support will be on the yellow line at the bottom, which is IDR 4,900, and if the price breaks over the yellow line, the trend is a positive bear. It is a little bit far fetch to 4,900, but it is not impossible because the previous double top resulting in a shortfall of the index.

With many uncertainty ahead, this should be a challenge for Mr. Jokowi and his ministries to handle. With many breakthrough, I am sure that the Indonesian government will do their very best to neutralize the economy.
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