The production of heavy equipment in Indonesia in the first half of 2014 fell by 25 percent (year-on-year) to 2,292 units. The decline in production is due to the still weak state of the mining and construction sectors in Southeast Asia’s largest economy. Main reasons being the implementation of the mineral ore export ban in January 2014 and low commodity prices, for example coal. Limited construction projects have been undertaken in the first half of 2014 as investors wanted to wait for the results of Indonesia’s legislative and presidential elections first.

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After Joko 'Jokowi' Widodo and Jusuf Kalla announced earlier today (19/05) to form a pair in the upcoming Indonesian presidential election (scheduled for 9 July 2014), supported by a coalition consisting of the PDI-P, NasDem, PKB and Hanura, the other pair also presented itself. Prabowo Subianto officially announced that Hatta Rajasa will be his running mate in the election. This pair is backed by Gerindra, PAN, PPP, PKS and Golkar. At the last moment Golkar, second-largest party in the April legislative election, decided to join this coalition.

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According to the latest information, Golkar and Partai Demokrat (PD) may form a coalition which will nominate Aburizal Bakrie (Chairman of Golkar) as its presidential candidate and Pramono Edhie Wibowo (PD member, a former army chief and incumbent President Susilo Bambang Yudhoyono's brother-in-law) as its vice-presidential candidate. Golkar is Indonesia's second-largest political party, while PD is the fourth-largest party based on the result of the April legislative election.

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It is becoming more and more likely that the Golkar party (the second-largest political party of Indonesia based on the legislative election that was held in April 2014), will join the coalition that consists of the PDI-P (winner of the legislative election), NasDem and PKB. This coalition has already announced its full support for highly popular Governor of Jakarta Joko “Jokowi” Widodo as the coalition’s presidential nominee for the presidential election (9 July 2014). The running mate of Jokowi, however, remains a question mark.

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The Indonesian presidential election, scheduled for 9 July 2014, is most likely to become a battle between Joko "Jokowi" Widodo and Prabowo Subianto. Although this had already been expected as both men can rely on popular support (according to various surveys) and have the political backing of important political parties, a number of developments on Tuesday (13/05) seem to confirm this expectation. Moreover, there is more clarity about the vice-presidential candidates that will join the July election.

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In Indonesian media it was reported today (13/05) that Hatta Rajasa, the current Coordinating Minister for Economic Affairs, will meet President Susilo Bambang Yudhoyono this afternoon. It is speculated that in this meeting Rajasa wil ask permission to resign from his post in order to be able to run as Prabowo Subianto's running mate in the presidential election (9 July 2014). A 2008 law stipulates that ministers need to resign when participating in the election (as presidential or vice-presidential candidate) to avert a possible conflict of interest.

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On 11 May 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic topics such as the revision of the Negative Investment List, an analysis of GDP growth in Q1-2014, the benchmark interest rate, the current account deficit, manufacturing, unemployment , the offical result of the legislative election, and more.

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Only minutes ahead of the deadline on Friday (09/05), the General Election Commission (KPU) released the official results of Indonesia’s 2014 legislative election. As had been expected, the official result is highly similar to the quick count results that had been published on the day of election (09/04). The current main opposition party the Indonesian Democratic Party of Struggle (PDI-P) won the election, securing 18.95 percent of the vote, followed by Golkar (14.75 percent) and the Great Indonesia Movement Party (Gerindra) with 11.81 percent.

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Indonesian newspaper Investor Daily reported that on Friday 9 May 2014 Joko Widodo, the presidential candidate of the PDI-P (winner of the April 2014 legislative election), will announce his running mate for the presidential election. According to the newspaper, Surya Paloh - founder of the NasDem party - said that the running mate (vice-presidential candidate) has already been agreed upon although he declined to mention a name. The PDI-P and NasDem formed a coalition last month in order to nominate a presidential candidate.

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Two influential Indonesian political parties, Golkar and Gerindra, may form a coalition in order to nominate a presidential and vice-presidential candidate for Indonesia's presidential election that is scheduled for 9 July 2014. After the PDI-P, which won the legislative election on 9 April 2014 with approximately 19 percent of the vote, Golkar (15 percent) and Gerindra (12 percent) came in second and third. However, both these parties contain a leader who has presidential aspirations.

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In the first half of 2014, 13 Indonesian companies conducted an initial public offering (IPO), including one relisting, on the Indonesia Stock Exchange (IDX). Total proceeds that were raised in the IPOs by these 13 companies was IDR 4.05 trillion (USD $340.3 million). However, both results were weaker than those in the same period last year. In the first half of 2013, 17 new listings were registered on the IDX and which managed to raise a combined total of IDR 10 trillion (USD $840.3 million). Why do we see less IPOs in Indonesia in 2014?

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It had been speculated for a while, but yesterday the official declaration of Indonesia's presidential candidates and their running mates (the vice-presidential candidates) were presented. In the upcoming election, scheduled for 9 July 2014, Jakarta Governor Joko 'Jokowi' Widodo will face Prabowo Subianto, former army general and former son-in-law to president Suharto (Indonesia's second president), in a battle for the country's presidential seat. What is there to tell about this battle?

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Joko Widodo, the presidential candidate of the PDI-P (Indonesia's current largest opposition party and which won the 2014 legislative election last April) may announce his running mate (the vice presidential candidate) on Wednesday (14/05). Newsportal Bisnis.com reported that Widodo, popularly known as Jokowi, hinted at this during a brief conversation between Jokowi and journalists on Monday. Names that are frequently mentioned in connection to the position of running mate of Jokowi are Jusuf Kalla and Abraham Samad.

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Indonesian cement sales fell 0.4 percent (year-on-year) to 4.52 million tons in April 2014. The decline in cement sales was the result of the country’s legislative election that was held on 9 April 2014 as consumers bought few building materials during the campaign period. Head of the Indonesian Cement Association (ASI) Widodo Santoso stated that a number of large infrastructure projects are currently being tendered and are thus unable to boost domestic cement sales yet.

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Indonesia’s HSBC Markit Purchasing Manager’s Index (PMI) showed a reading of 51.1 in April 2014, significantly up from 50.1 in the previous month, meaning that manufacturing activity in Indonesia has grown (a reading above 50.0 indicates expansion, while a reading below 50.0 indicates contraction). In fact, amid improved economic conditions as well as strong demand, manufacturing activity in Southeast Asia’s largest economy expanded at the fastest pace in 11 months.

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On the first trading day of the week (Monday 28 April 2014), the Indonesian rupiah exchange rate depreciated 0.19 percent to IDR 11,587 per US dollar based on the Bloomberg Dollar Index. Several factors - both internal and external - influenced the rupiah as well as Indonesian stocks in a negative way. The benchmark stock index of Indonesia (known as the Jakarta Composite Index or IHSG) declined a whopping 1.61 percent to 4,818.76 points, in line with the regional trend in Asia today.

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The Indonesian rupiah exchange rate ended the week with a 0.32 percent gain to IDR 11,565 per US dollar on Friday (25/04) based on the Bloomberg Dollar Index. Despite still high local demand for US dollars ahead of the month-end (for reasons of profit repatriation, imports and debt repayments), the rupiah managed to appreciate as (foreign and domestic) investments in Indonesia were reported to have reached a new record at IDR 106.6 trillion (USD $9.4 billion) in the first quarter of 2014.

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Mostly declining Asian stock indices, led by Hong Kong's Hang Seng Index (HSI) and the Shanghai Stock Exchange Composite, had a negative influence on the performance of Indonesia's benchmark stock index (known as the Jakarta Composite Index or IHSG) on Wednesday (23/04). Moreover, today's sharp rupiah depreciation contributed to the 0.10 percent decline to 4,893.15 points. Based on the Bloomberg Dollar Index, the Indonesian rupiah exchange rate depreciated 0.94 percent to 11,630 per US dollar.

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Due to a lack of positive domestic and external sentiments, the Indonesian rupiah exchange rate has depreciated to a six-week low against the US dollar. Based on the Bloomberg Dollar Index, Indonesia's currency declined 0.66 percent to IDR 11,521 per US dollar by 16:22 local Jakarta time. In fact, several negative domestic sentiments are the reason behind the current depreciation. Firstly, revived concerns about Indonesia's current account deficit and, secondly, concerns about capital outflows due to dividend payments.

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The Indonesian rupiah exchange rate moved within limited range on Wednesday. Based on the Bloomberg Dollar Index, the currency depreciated 0.07 percent to IDR 11,436 per US dollar. Since Thursday (10/04), the rupiah has had to cope with pressures as Indonesia's legislative election was unable to provide political certainty. On the other hand, the country's improved economic fundamentals - easing inflation and the narrowing current account deficit - have resulted in capital inflows, thus supporting the rupiah.

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