Indonesia\u2019s financial markets are expected to close in positive\nterritory today. The Composite Stock Price Index (IHSG) managed to\nreverse course and close Monday\u2019s trading (31\/8\/2026) in the green,\nposting a modest gain amid persistently high market volatility and\nportfolio adjustments by investors ahead of the effective MSCI\nrebalancing.<\/p>\n
Based on trading data, the IHSG closed up 7.36 points, or 0.11%, at\n6,525.48. During the session, the index briefly fell to 6,476.18 before\nrebounding to touch a high of 6,528.10.<\/p>\n
The IHSG\u2019s gain was primarily supported by large-capitalisation\nstocks, particularly in the financial sector. PT Bank Rakyat Indonesia\n(BBRI) was the largest contributor, adding 9.32 points to the index.<\/p>\n
Other stocks that supported the IHSG included PT Alamtri Resources\nIndonesia Tbk (ADRO) with 3.24 points, PT Merdeka Gold Resources Tbk\n(BRMS) with 2.97 points, PT Bank Negara Indonesia (Persero) Tbk (BBNI)\nwith 2.81 points, and PT Adaro Andalan Indonesia Tbk (AADI) with 2.20\npoints.<\/p>\n
By sector, gains were led by the industrial sector, which rose 0.50%,\nfollowed by non-primary consumer goods at 0.42% and primary consumer\ngoods at 0.22%.<\/p>\n
However, several sectors remained under pressure. The healthcare\nsector suffered the deepest correction at 2.35%, followed by utilities\nat 0.88%, technology at 0.67%, energy at 0.27%, and property at\n0.20%.<\/p>\n
Among the stocks weighing on the index, PT Bayan Resources Tbk (BYAN)\nwas the largest drag with a negative contribution of 8.67 points. It was\nfollowed by PT Amman Mineral Internasional Tbk (AMMN) at 3.59 points, PT\nSejahteraraya Anugrahjaya Tbk (SRAJ) at 3.52 points, and PT DCI\nIndonesia Tbk (DCII) at 3.41 points.<\/p>\n
Trading activity was also brisk. Total transaction volume reached\n51.3 billion shares, with a transaction value of Rp25 trillion and a\ntrading frequency of 2.39 million times.<\/p>\n
A total of 392 stocks advanced, while 233 declined and 166 remained\nunchanged.<\/p>\n
The rupiah began the week under renewed pressure against the US\ndollar. However, the weakening of the Garuda currency began to ease\ntowards the close.<\/p>\n
During trading, the rupiah was pressured to Rp17,755\/US$. However,\ntowards the close, the rupiah managed to trim its losses by 45\npoints.<\/p>\n
Nevertheless, the closing position was still 25 points weaker than\nFriday\u2019s trading (28\/8\/2026), when the rupiah stood at Rp17,685\/US$.<\/p>\n
In the bond market, the yield on 10-year government bonds (SBN) rose\nto 6.99% on Monday, from 6.96% the previous Friday. Rising yields\nindicate that SBN prices are falling as investors sell.<\/p>\n
US stock markets closed lower on Monday, or early Tuesday morning\nIndonesian time. The markets fell after the US and Iran engaged in\ndirect exchanges of fire for the first time in a month. Despite this,\nall three major Wall Street indices still recorded gains for August.<\/p>\n
The S&P 500 fell 0.33% to 7,686.14. The Nasdaq Composite weakened\n0.12% to 26,370.89. Meanwhile, the Dow Jones Industrial Average\ncorrected 374.09 points, or 0.7%, to 53,185.90.<\/p>\n
The Dow was pressured by declines in Goldman Sachs and Alphabet\nshares.<\/p>\n
Tensions escalated again after the US Central Command (CENTCOM)\nconfirmed that the US military on Sunday struck two rocket launchers on\nLarak Island, Iran.<\/p>\n
The strike was the first publicly confirmed US attack on Iranian\npositions since late July. Iranian state media also reported that Tehran\nattacked a US military base in Jordan in retaliation.<\/p>\n
Oil Prices Surge<\/p>\n
The resumption of US-Iran military action immediately shook energy\nmarkets. Crude oil prices jumped more than 2% on Monday.<\/p>\n
West Texas Intermediate (WTI) crude closed up 2.83% at US$85.76 per\nbarrel. Meanwhile, Brent crude strengthened 2.71% to US$90.49 per\nbarrel.<\/p>\n
The rise in oil prices also pushed up long-term US Treasury yields,\nadding pressure to the stock market.<\/p>\n
Tom Hainlin, National Investment Strategist at U.S. Bank Asset\nManagement, assessed that current oil price levels are already\nrelatively high, but not yet sufficient to deal a major blow to the US\neconomy.<\/p>\n
\u201cThe world economy still has enough oil for its needs, and prices of\nUS$80-US$90 are not restrictive enough to cause the economy to\ncollapse,\u201d he told CNBC International.<\/p>\n
According to him, current oil prices are only at the upper bound of\nthat range and have not yet altered the outlook for consumer spending,\nbusiness activity, artificial intelligence (AI), manufacturing returning\nto the US, or the electrification of the economy.<\/p>\n
However, the situation could change if oil prices breach US$100 per\nbarrel. According to Hainlin, that level begins to have the potential to\nbecome a significant burden on the economy.<\/p>\n
Wall Street Still Posts Gains in August<\/p>\n
Despite end-of-month trading being coloured by turmoil due to rising\nMiddle East tensions, Wall Street still managed to post broad gains\nthroughout August, with the technology sector as the main driver.<\/p>\n
The Dow Jones rose more than 1% during August. This marked its fifth\nconsecutive monthly gain and its 15th positive month in the last 16.<\/p>\n
Meanwhile, the S&P 500 surged 2.6% and the Nasdaq Composite\nsoared 3.9% during August. Both recorded their first monthly gains since\nMay.<\/p>\n
The S&P 500 and Dow Jones even briefly hit all-time record highs\nin August.<\/p>\n
Thus, despite the US-Iran escalation once again posing a threat to\nmarkets, Wall Street managed to close August with a positive report\ncard.<\/p>\n
Indonesia\u2019s financial markets today will be overshadowed by a number\nof important data announcements, ranging from inflation and\nmanufacturing to the trade balance.<\/p>\n
From abroad, the re-escalation of the Iran-US conflict and the fall\non Wall Street could be negative sentiment.<\/p>\n
The following are several market sentiments today:<\/p>\n
US President Donald Trump threatened to strike Iran again after the\ntwo countries engaged in direct exchanges of fire for the first time in\nabout a month.<\/p>\n
Iran launched missiles at two US bases in Jordan in retaliation for\nthe US strike on Larak Island. Washington said the strike targeted\nIranian launchers suspected of preparing to lay mines in the Strait of\nHormuz.<\/p>\n
\u201cWe will hit them hard. There will be a response,\u201d Trump said, as\nquoted by Reuters.<\/p>\n
However, Trump said the latest strikes did not yet mean the war had\nreturned to full scale. He even said Iran had been \u201ccompletely defeated\nmilitarily\u201d.<\/p>\n
In addition to military strikes, Washington continues to pressure\nTehran through secondary sanctions against countries and companies that\nbuy Iranian oil.<\/p>\n
US Treasury Secretary Scott Bessent said Iran began launching attacks\nbecause economic pressure from sanctions was becoming increasingly\nsevere. The US even plans to announce new sanctions every week, with the\nbanking sector as the initial target.<\/p>\n
Meanwhile, Iranian President Masoud Pezeshkian stressed that Tehran\nstill wants a resolution through negotiation.<\/p>\n
The latest escalation poses a threat to the Strait of Hormuz, a route\nthrough which about one-fifth of the world\u2019s crude oil and gas trade\nnormally passes. Disruption in this region has the potential to push\nglobal energy prices higher again.<\/p>\n
Following the escalation, oil prices again touched the US$90 per\nbarrel level.<\/p>\n
The yield on 10-year US Treasury notes rose again on Monday\n(31\/8\/2026), recording gains for the fourth consecutive session. This\nrise in yields is bad news for Indonesia because it could trigger an\nincrease in SBN yields, thereby increasing the government\u2019s debt\nburden.<\/p>\n
The 10-year Treasury yield rose to 4.76%, its highest level since\nJanuary 2025. The increase came after oil prices jumped following the\nrenewed outbreak of clashes between the US and Iran for the first time\nin about a month.<\/p>\n
The surge in oil prices triggered fresh concerns about US inflation,\nwhile also prompting market participants to increase bets on the\npossibility that the Federal Reserve will raise interest rates in\nSeptember.<\/p>\n
These expectations strengthened further after Fed Chair Kevin Warsh\nmade statements at the Jackson Hole symposium last Friday.<\/p>\n
Warsh said the Fed still \u201chas work to do\u201d if policymakers have not\nyet gained confidence that inflation is moving towards the 2%\ntarget.<\/p>\n
Warsh has consistently emphasised the importance of bringing\ninflation down. However, the Fed held interest rates steady at its June\nand July meetings, so the timing of the next policy change remains a\nquestion mark.<\/p>\n
Currently, the market estimates a probability of around 64% that the\nFed will raise interest rates by 25 basis points in September.<\/p>\n
If realised, a rate hike would tighten financial conditions and\npotentially add pressure to risky assets, including equities.<\/p>\n
On the other hand, the combination of rising Treasury yields and oil\nprices is something the market needs to watch, as it could reinforce\ninflationary pressures while limiting the Fed\u2019s room to loosen monetary\npolicy.<\/p>\n
Indonesia\u2019s August manufacturing PMI data will be released today,\nTuesday (1\/9\/2026). The Purchasing Managers\u2019 Index (PMI) data shows\nIndonesia\u2019s PMI stood at 50.2 in July 2026. This figure represents an\nimprovement after the PMI recorded a contraction in June 2026\n(46.9).<\/p>\n
Investors and businesses are awaiting this data to gauge the\ncapability of Indonesia\u2019s processing industry heading into the fourth\nquarter of 2026.<\/p>\n
Consensus estimates the index will rise slightly to 50.5, from 50.2\nin July. If it remains above the 50 level, Indonesia\u2019s manufacturing\nsector is still in expansion territory.<\/p>\n
In July 2026, production activity increased again for the first time\nsince February, amid stabilising new orders and improving customer\nconfidence.<\/p>\n
The rise in the PMI was supported by increased production volumes\nafter four consecutive months of decline.<\/p>\n
Although growth remains limited, businesses reported an improvement\nin demand and rising customer confidence.<\/p>\n
However, the surge in raw material prices remains an obstacle to a\nstronger recovery. In line with this, new orders remained stable after\nexperiencing a sharp contraction in June 2026.<\/p>\n
Statistics Indonesia (BPS) will announce two important data sets\ntoday, Tuesday (1\/9\/2026): August 2026 inflation and the July 2026 trade\nbalance. This data is important for measuring which food and non-food\ncommodities have experienced price surges and their impact on\nIndonesia.<\/p>\n
Indonesia\u2019s Consumer Price Index (CPI) is expected to rise, or\nexperience inflation, in August 2026. The CPI increase is primarily\ndriven by rising prices of several food commodities, gold, and education\ncosts.<\/p>\n
However, declines in airfares and non-subsidised fuel prices are\nexpected to restrain inflationary pressure.<\/p>\n
The market consensus compiled by CNBC Indonesia from 13 institutions\nestimates that the CPI on a month-to-month basis will rise, or\nexperience inflation of 0.17%.<\/p>\n
Meanwhile, the CPI on a year-on-year basis is estimated to rise, or\nexperience inflation of 3.11%.<\/p>\n
For reference, in the previous inflation release for the July 2026\nperiod, deflation of 0.14% was recorded on a monthly basis, while annual\ninflation stood at 2.88%.<\/p>\n
Thus, the CPI is expected to reverse course and rise on a monthly\nbasis after declining in July. Annual inflation is also projected to\nincrease by 0.25 percentage points compared to the previous month.<\/p>\n
The Office of Chief Economist team at Bank Mandiri estimates that the\nrise in inflation is primarily driven by a reversal in volatile food\nprices. This group is expected to rise again after falling quite sharply\nin July.<\/p>\n
The increase mainly occurred in the prices of chicken meat and bird\u2019s\neye chillies. Food price pressures also risk persisting due to\nproduction disruptions triggered by El Ni\u00f1o and the dry season.<\/p>\n
\u201cFood price pressures may continue amid production disruptions due to\nEl Ni\u00f1o and the dry season, although declines in garlic and shallot\nprices provide some offset,\u201d wrote the Bank Mandiri Office of Chief\nEconomist team.<\/p>\n
BPS will also release July 2026 trade balance data. For reference,\nIndonesia\u2019s trade balance recorded a deficit of US$450 million in June\n2026.<\/p>\n
This was due to export value of US$25.46 billion, while imports were\nrecorded at US$25.91 billion.<\/p>\n
The public is now waiting to see whether Indonesia will record a\ndeficit for three consecutive months in July 2026 or be able to reverse\ncourse into a surplus.<\/p>\n
The government has begun implementing relaxed rules on foreign\nexchange proceeds from natural resource exports (DHE SDA) in the mining\nsector on 1 September 2026. This policy has been socialised to domestic\nand foreign business actors.<\/p>\n
The relaxation of the rules also agreed on 15 foreign exchange banks\nas placement accounts for DHE SDA special accounts.<\/p>\n
The 15 banks consist of five state-owned banks, or Himbara, namely\nBank Mandiri, Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI),\nBank Tabungan Negara (BTN), and Bank Syariah Indonesia (BSI).<\/p>\n
The remaining 10 are non-state-owned banks such as Standard Chartered\nBank, Deutsche Bank AG, MUFG Bank Ltd., JP Morgan Chase Bank N.A.,\nCitibank N.A., Bank of China, PT Bank ICBC Indonesia, PT Bank China\nConstruction Bank Indonesia Tbk, PT Bank SMBC Indonesia Tbk, and PT Bank\nHSBC Indonesia.<\/p>\n
The crucial Article 18A is one of the highlighted provisions.<\/p>\n
Article 18A of Government Regulation 21\/2026 regulates special\nprovisions for the implementation of bilateral agreements on trade or\nother trade-related understandings\/agreements.<\/p>\n
For DHE SDA originating from the mining sector, these provisions\ninclude: the obligation to place at least 30% for a minimum period of 3\nmonths from placement in the DHE SDA Special Account; placement may be\nmade at banks conducting business in foreign currency; and conversion to\nRupiah may be made at banks conducting business in foreign currency.<\/p>\n
The decision to implement Article 18A was established through a\nMinisterial-Level Coordination Meeting on 23 July 2026.<\/p>\n
The government has designated five countries that meet the criteria\nof Article 18A: the United States, China, Hong Kong, Australia, and\nCanada.<\/p>\n
These five countries are the countries with the largest investment\nvalue in Indonesia\u2019s mining sector, while also having bilateral\nagreements on trade or other trade-related understandings\/agreements\nwith Indonesia as required by Article 18A.<\/p>\n
The use of the five largest countries of origin for investment in the\nmining sector as the basis for selection is intended to ensure that the\nArticle 18A facility is precisely targeted at the investment sources\nthat contribute most to national mining activities.<\/p>\n
The following are the main points of the new rules:<\/p>\n
Mandatory placement of 30% for a minimum of 3 months for mining\nexporters utilising the Article 18A facility.<\/p><\/li>\n
Funds may be placed at state-owned or non-state-owned foreign\nexchange banks designated by the government.<\/p><\/li>\n
This facility is optional for qualifying exporters.<\/p><\/li>\n
If not utilising the facility, exporters continue to follow the\nold rules, namely 100% placement for a minimum of 12 months for non-oil\nand gas mining.<\/p><\/li>\n
The Article 18A facility applies to mining companies in the form\nof limited liability companies (PT) with shareholders from partner\ncountries, with a minimum ownership of 10%.<\/p><\/li>\n
The government has designated 5 partner countries: the United\nStates, China, Hong Kong, Australia, and Canada.<\/p><\/li>\n
Of the 537 identified companies, 64 exporters, or about 12%, meet\nthe criteria for the facility.<\/p><\/li>\n
A total of 15 foreign exchange banks have been designated as DHE\nplacement banks, consisting of 5 state-owned banks and 10 private\nbanks.<\/p><\/li>\n
The policy takes effect from 1 September 2026.<\/p><\/li>\n<\/ul>", "url": "https:\/\/jawawa.id\/newsitem\/revised-dhe-rules-and-bi-incentives-take-effect-today-inflation-stirs-concern-1788220270", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }