Positive Domestic Financial Market Investment Indicators

On May 19, 2017, the Jakarta Composite Index (JCI) of the Indonesia Stock Exchange closed at its highest level, 5,791.88, representing a 9.35 percent increase from its 2016 closing position. The Indonesia Bond Pricing Agency (IBPA) Composite Bond Index (ICBI) closed at 223.89, also a 7.38 percent increase compared to its year-end position. Similarly, the Indonesian Rupiah appreciated by 1.65 percent to 13,361 per US dollar compared to its 2016 closing position.

Investment indicators in the domestic financial market showed positive movement throughout 2017 (YTD). Furthermore, the rating agency Standard & Poor's upgrading Indonesia's foreign debt rating to investment grade last weekend could trigger an increase in domestic stock and bond prices.

Finally, S&P raised Indonesia's rating to BBB-, thus entering the investment-grade level from its previous junk bond category. This increase follows two other global rating agencies, Moody's Investor Services and Fitch Ratings, which had already placed Indonesia at investment grade. Indonesia's entry into the investment-grade level can encourage the inflow of foreign capital into the domestic financial market as the investment risk in Indonesia is considered to be decreasing.