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TGIF Monthly Wrap: June 2024

Updated: 50 minutes ago

  • Major Japan Auto Sales Halted by Certification Flaw, Rupiah Weakness Squeezes Businesses, BREN Gets Rp251.69 Billion Boost, Bitcoin Tumbles Below $60,000


By Cherisha Zahwa Putri, Cintanya Aiko Syaila, and Rifqiditya Ayman

June 28, 2024 at 16:30 GMT+7



Daihatsu Motor's next President (Masahiro Inoue) and Toyota Motor Corp. President (Koji Sato) | Source: Reuters



The Ministry of Land, Infrastructure, Transport, and Tourism found significant safety test irregularities in major Japanese automakers, including Toyota, Mazda, Yamaha, Honda, and Suzuki. Consequently, Toyota, Mazda, and Yamaha suspended shipments for six models to address certification flaws, emphasizing their commitment to safety and public trust. 


Despite the findings, Toyota assured that vehicle performance remains lawful, with Chairman Akio Toyoda apologizing to stakeholders. The Ministry plans on-site inspections following similar issues at Daihatsu, Toyota Industries, and Hino Motors. 


While addressing these irregularities, Toyota will continue production, aiming to rebuild trust and uphold high safety standards. The affected companies are working to rectify the issues and restore confidence in their vehicle safety certifications.


 

Prajogo Pangestu | Source: IDX Channel



BREN's market fluctuations have drawn attention, notably from Prajogo Pangestu, Barito Pacific Group's founder, who acquired 37,848,800 shares worth Rp251.69 billion, boosting market confidence. 


Pangestu's investment, grounded in his belief in Barito Pacific's potential, rejuvenated investor trust. BREN subsidiaries, Barito Wind Energy and Star Energy Geothermal, are expanding with a 75 MW wind power plant and a 116 MW geothermal project, respectively, enhancing BREN's renewable energy portfolio. 


Barito Group's diversified interests in energy, petrochemicals, logistics, and property mitigate risks, while significant foreign investments reflect global confidence in its strategies.


 

Stacks of both US dollars and Indonesian rupiah | Source: Antara



Rising production costs and potential consumer price hikes due to the weakening rupiah and high interest rates are becoming a significant concern for businesses. 


Based on the Jakarta Interbank Spot Dollar Rate (Jisdor), on Friday (6/14), the rupiah closed at Rp16,374 per US$ or weakened 6.33% compared to the closing at the end of 2023. 


As the rupiah depreciates, the cost of imported raw materials and other production inputs rises, further exacerbated by the high interest rates that increase the cost of borrowing. Consequently, businesses may be compelled to pass these higher costs to consumers through price adjustments.


 

Bitcoin Illustration | Source: CNBC


Bitcoin Crashes Below US$60,000: Correction or Collapse?


Bitcoin's value recently dipped below US$60,000, marking its lowest point since May 3, and recording a 7% decline to US$59,562.54. This drop continues a trend seen over the past week, during which the cryptocurrency has fallen nearly 11%. 


From its record high in March, Bitcoin has now declined about 19%, signaling increasing volatility in the crypto market. Substantial outflows from crypto investment products mark the second consecutive week of such activity. 


Trading volumes have hit their lowest levels since January, underscoring reduced investor enthusiasm and potential uncertainty about the market's direction. Analysts point to macroeconomic factors, highlighting pessimism around the Federal Reserve's future interest rate cuts.


 

Sources:

Bloomberg

CNBC

Reuters


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