Lord have mercy... Dow Jones has dropped 3 days in a row, and ended up at 8500 yesterday. I haven't checked tonight, because its still trading. I think its around 8300-8400. moving sideways. JCI has also been suspended for 2 and a half days, due to down by more than 10% for 2 days in a row. I cannot believe that such US crisis has brought INdonesia down for the second time. I heard today that Rupiah was traded around 10.000 per US$. The interest rate (BI Rate) has been brought up by BI to 9.5%, while 6 other central banks has brought down their interest rate. The interest rate spread has not been able to help the weakening of Rupiah.
The main question is: Will this crisis bring INdonesia down to another economic crisis. IMHO, not necessarily. Indonesian fundamentals now is better than that of in 1998. Banking conditions are much better, and much more regulated. No panic and rush outside the exchange. They are highly supervised. The amount of offshore loan, government's and private's are much less than that of in 1998, and the tenor profile is longer (to my knowledge). The only panic people are investors who put their money in the Stock exchange, who mostly are foreign investors. According to KSEI, the market share for Foreign investors in BEI is up to $70 billion, $20 billion more than our forex reserves. No wonder the IHSG down by 10% for two days in a row...
Blog again later...
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