Indonesia Market Report

by Association of Indonesian Securities Companies

Lily Widjaja, Chairperson
Osaka, September 2011

Highlights

Economic Performance Capital Market Performance Regulatory Developments Industry Developments & Challenges

Economic Performance
Indicator Population (million) GDP Growth Rate (% y-o-y) Export (USD million) Import (USD million) Surplus (USD million) Exchange Rate-end period (IDR/USD) Foreign Exchange Reserve (USD million) Unemployment Rate (%)
* Estimated - GDP and Exchange rate are based on Government Projection - Export, Import, and Surplus are based on 1Q-2011 with estimated number for June 2011 - Foreign reserve is based on the position of end of August 2011 -- Unemployment Rate is based on the position of February 11

2008 229.03 6.0 137,020.4 129,197.3 7,823.1 10,950 51,639 8.39

2009 231.83 4.5 116,510.0 96,829.2 19,680.8 9,425 66,105 7.87

2010 237.6 6.1 157,779.1 135,663.3 22,115.8 8,991 96,207 7.14

2011* 245.6 6.5 98,644.0 83,591.7 15,052.3 8,700 122,671 6.8

Economic Performance
Indonesian Central Bank Interest Rate
14
14.00

Indonesia Inflation - CPI

12
12.00

10
10.00 8.00 % 6.00 4.00 2.00 Jan08 May08 Sep08 Jan09 May09 Sep09 Jan10 May10 Sep10 Jan11 May11 Sep11

6.75

% yoy

8 6 4 2 0 1 3 5 7 9 11 1 2008 3 5 7 2009 9 11 1 3 2010 5 7 9 11 1 2011 3 5 7

4.79

Source : Indonesia Central Bank

Source : BPS- Statistic Indonesia

Economic Performance
Exchange Rate vs. Foreign Exchange Reserve (Jan-2008 Aug-2011) S&P Rating - Indonesia
Foreign Exchange Reserve 140.00 120.00 100.00
(USD Billion)

Exchange Rate 14,000 12,000 10,000

IDR/USD

BBB+ 10 BBB 9 BBB-8 BB+ BB

ABC 7 6 5 4 3 2

BBB+ B B-

80.00 60.00 40.00 20.00 1 4 7 10 1 4 2009 7 10 1 4 2010 7 10 1 4 2011 7 2008

8,000 6,000 4,000 2,000 -

1 CCC+

CCC 0
n0 Ju 3 l- 0 Ja 3 n0 Ju 4 l- 0 Ja 4 n0 Ju 5 l- 0 Ja 5 n0 Ju 6 l- 0 Ja 6 n0 Ju 7 l- 0 Ja 7 n0 Ju 8 l- 0 Ja 8 n0 Ju 9 l- 0 Ja 9 n1 Ju 0 l- 1 Ja 0 n1 Ju 1 l- 1 1
7 6 5 4 3 2 0

Moodys Rating - Indonesia

10 Baa1

Baa29 Baa38 Ba1

ABC

Source : Indonesia Central Bank

Ba2 Ba3 B1 B2 B3

Capital inflow to Indonesia has strengthened exchange rate and increased foreign exchange reserve. On April 2011 Indonesias rating was upgraded by S&P to BB+ (one level below investment grade). Earlier on January 2011, Moodys increased the rating to Ba1.

Caa11
-0 Ju 3 l- 0 Ja 3 n0 Ju 4 l- 0 Ja 4 n0 Ju 5 l- 0 Ja 5 n0 Ju 6 l- 0 Ja 6 n0 Ju 7 l- 0 Ja 7 n0 Ju 8 l- 0 Ja 8 n0 Ju 9 l- 0 Ja 9 n1 Ju 0 l- 1 Ja 0 n1 Ju 1 l- 1 1

Ja n

Ja

Capital Market Performance

Stock Market

Trading Value, Listed Issuers and Market Capitalization in 2011 increased compared to 2010. Composite Index record high 4,193 on 1 August 2011. On 23 September 2011, the Composite Index was at 3,426.34 (7.48% vs. 2010).

2009 Total Trading Value (IDR billion) Average Trading Value per Day (IDR billion) Composite Index High Low Close Listed Issuers Market Capitalization (IDR billion) Source: IDX 2,534.36 1,256.11 2,534.36 398 2,019,375 975,135 4,046

2010 1,176,237 4,801

Aug 2011 861,306

4,500

IDX Composite
4,000

4,193 (1 Aug 2011)

5,284 10.1%

3,500

7.48% 46.1%

3,000

3,786.10 2,475.57 3,703.51 420 3,247,097

4,193.44 3,346.06 3,841.73 432 3,468,309 6.81%

2,500

2,000
04- Jan- 10 04- Mar - 10 04- May- 10 04- J ul- 10 04- S ep- 10 04- Nov - 10 04- Jan- 11 04- Mar - 11 04- May- 11 04- J ul- 11 04- S ep- 11

Capital Market Performance

20 Most Active Brokerage Houses in Total Value Jan-Aug11

Name Credit Suisse Securities Indonesia JP Morgan Securities Indonesia CIMB Securities Indonesia Deutsche Securities Indonesia Kim Eng Securities Bahana Securities CLSA Indonesia UBS Securities Indonesia Macquarie Capital Sec. Indonesia e-Trading Securities Total (IDR-trill) 125.13 94.11 87.94 85.12 83.32 73.37 71.11 67.17 61.75 57.36 % 7.26 5.46 5.11 4.94 4.84 4.26 4.13 3.90 3.58 3.33 Rank 11 12 13 14 15 16 17 18 19 20 Name Mandiri Sekuritas OSK Nusadana Sec. Indonesia Merrill Lynch Indonesia Danareksa Sekuritas Ciptadana Securities Indo Premier Securities Net Sekuritas BNI Securities Valbury Asia Securities UOB Kay Hian Securities Total of 20 Firm % of Total Transaction Total Transaction Total (IDR-trill) 55.19 47.14 44.74 42.15 39.26 38.51 28.25 27.36 25.83 24.78 1,179.58 68.48 1,722.61 % 3.20 2.74 2.60 2.45 2.28 2.24 1.64 1.59 1.50 1.44 1 2 3 4 5 6 7 8 9 10

Rank

Source : IDX

20 amongst 118 active brokerage houses accounted for 68% total value transactions (11 of these top 20 brokers are foreign houses, accounted for 46% total value transactions). Total 25 foreign brokers accounted for 55% total value transactions.

Capital Market Performance

Bond Market

Total Value Transaction Bond (Rp-trill)

2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 2007 2008 2009 2010 2011* * 2011 only consist of Jan-Aug Total Govt and Corp Bond (Rp-trill) Corporate Bond 100.00 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 -

The total transactions of the bonds has increased significantly for the past two years. Government Bond holds the majority of the total bond volume transaction and outstanding.

Source : IDX excluding non IDR dominated Corporate bond

Bond Outstanding Value (Rp-trill)

1,000 800 609 600 515 436 400 200 2007 2008 2009 2010 2011* * 2011 only cons is t of Jan-Aug 535 757 670 582 641 840 704

Series - Issued

2010 81 245

2011* 86 281

Government Corporate
Source : IDX * 2011 only consist of Jan-Aug

Total Bond (Rp-trill)

Govt Bond (Rp-trill)

Capital Market Performance

Mutual Fund

The Mutual Fund also experienced significant development

Composition of Net Asset Value of Mutual Fund as of August 2011

NAV of Mutual Fund and Unit 200 180 160 140 120 100 80 60 40 20 1 2008 2009 2010 2 3 2011 4 5 6 7 8 NAV (IDR-Tril) Unit (Bio)

ET F
174.25

P r ot ect ed

Fi x ed I n come

I n dex

S yar a ih Mx i ed

86.36

M on ey M ar ket S t ock

Source : Bapepam-LK website Mutual Fund Information Center

Regulatory Developments

Revised Regulations introduced end of 28 December 2010 to be effective 1 February 2012:

Internal Control for Securities Company (4 Departments revised to 6 Functions, incl. Compliance and Risk Management) Adjusted Net Working Capital (single haircut to various haircuts, and ranking liabilities risk-based capital) Safety of Securities Deposited with Securities Company

Segregated Funds Account for Clients at Payment Bank, in addition to Securities Sub-Account for Clients at Central Securities Depository Surveillance System to monitor irregular transactions BCP to ensure business continuity

Regulatory Developments

Single Investor Identification (SID) and Trading-ID AKSes Card Facility Investor Protection Fund Integration of Securities Company Back Office with Securities Central Depository Straight Through Processing KYC and Anti-Money Laundering

Industry Developments & Challenges

Direct Market Access On-line Trading and Mobile Trading Brokers Competition & Anti-Monopoly

Brokerage fee Underwriting fee Professional Exams Board Capital Markets School

Licensed Professionals

Industry Developments & Challenges

Education and Training

Advanced Education for Directors KYC and Anti-Money Laundering Training Clients Employees Securities Companies

Securities Company Information System

Industry Developments & Challenges

ASEAN Capital Market Integration / ASEAN Gateway? ASEAN Economic Community in 2015?

Thank You