Missing motorbikes point to Indonesian demand hole

June 19, 2015

A 36 percent slide in motorcycle sales in May shows just how fast falling commodity prices are eroding purchasing power. More worrying, however, is President Joko Widodo’s failure to offset the shortfall by boosting investment. A weakening currency is compounding the challenge.

AirAsia’s minority structure clouds crash impact

January 6, 2015

The Malaysian carrier owns just 49 percent of the tragedy-hit Indonesian unit. Accounting rules partly insulate the parent from profit fluctuations. But a shared brand, intercompany loans, and leasing agreements mean the woes of its minority partners aren’t neatly contained.

Cheap oil is no tonic for sluggish Asian economies

October 17, 2014

Less expensive petrol and diesel mean smaller subsidy bills and healthier budgets in India and Indonesia. For others in the region, though, falling crude prices are a worrying sign of stalling global growth. Asia has too much debt to welcome disinflation.

Asia’s reform spotlight swings to Indonesia

August 22, 2014

The election of a charismatic leader raises hopes for overdue change. Joko Widodo’s rise invites comparisons with India’s Narendra Modi and Shinzo Abe in Japan. In some ways, Indonesia’s new president faces the more daunting challenge. But the rewards for faster reform are large.

Fed adds urgency to Indonesia’s fuel reform test

August 20, 2014

President-elect Joko Widodo’s first big challenge will be to rethink the country’s $30 billion energy subsidy. Though higher fuel prices will be unpopular, the handout boosts the trade deficit. That makes Indonesia extra vulnerable to capital flight when U.S. interest rates rise.

Close presidential race may slow Indonesia reforms

July 9, 2014

Popular Jakarta Governor Joko Widodo faces a tough challenge from ex-general Prabowo Subianto in the country’s presidential poll. While the latter’s nationalistic talk makes investors edgy, a slim win for the former could also dim hopes of strong leadership and lasting change.

DBS deal tests Indonesia’s deep Singapore-phobia

April 25, 2012

Even a 52 percent premium may not secure the Singaporean bank’s $7.2 bln takeover of Bank Danamon. A deal would benefit all sides and burnish Indonesia’s image as a hot investment destination to boot. But looming elections and longstanding mistrust may trump commercial logic.

Asia’s bonds look shinier as Europe and China slump

May 16, 2012

The region’s robust finances have made its sovereign debt a safe haven as bigger economies stall. An indiscriminate sell-off will affect everyone, but Indonesia, Japan and the Philippines all have qualities that should leave them less hard hit.

Lady Gaga not the only one turned off by Indonesia

May 29, 2012

The pop diva nixed a planned show over conservative protests and demands she tone down her act. Investors feel similar about demands they cede some control in mining and finance. Many are now selling stocks and the rupiah. Indonesia’s assertive new strut may backfire.

Indonesia rediscovers the Faustian bargain of FDI

June 11, 2012

The central bank is fighting to defend the currency from foreign dismay over shifting policies. Record foreign direct investment is a vote of confidence, but does not confer carte blanche. Big inflows actually make Indonesia more, not less, susceptible to foreign mood swings.