03/02/2026

BIZ & FINANCE TUESDAY | FEB 3, 2026

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Indonesia excluded in rush to emerging markets

Maruti Suzuki: Production constraints to last a few more months B ENGALURU: India’s top carmaker Maruti Suzuki expects ongoing production constraints to persist for “a few more months”, an executive said yesterday, following the company’s report of flat domestic sales alongside higher exports for January. The company, a unit of Japan’s Suzuki Motor, has been struggling to keep pace with rising local demand, with waiting periods for mass market cars such as the Wagon R stretching beyond a month. The carmaker is currently using some production lines to assemble cars across various segments and plans to add additional capacity in 2026. Maruti has about 175,000 pending bookings and is running plants on Sundays and public holidays to catch up with demand, Partho Banerjee, senior executive director, marketing and sales, told reporters. “This production constraint will stay for a few more months. Our production team is working, and very soon maybe we will be able to add some more capacity and serve our customers in a shorter period,” Banerjee said. The firm, India’s largest car exporter, is assessing which models it could ship to Europe under India’s trade agreement with the European Union, the executive said. While local sales rebounded after New Delhi’s sweeping tax cuts in late September last year, overseas shipments have been strong, led by demand from Japan, South Africa and Saudi Arabia. For January, Maruti’s domestic sales rose just 0.5% to 174,529 units, with sales of small cars declining 9.8% while those of utility vehicles rising 16% from a year earlier, data released yesterday showed. Exports surged 88% to a record high 51,020 units in January. Domestic sales from October to January rose 16.5%, while exports advanced 22%. On Sunday, rivals Hyundai Motor India and Tata Motors Passenger Vehicles posted their highest-ever monthly domestic sales, while SUV maker Mahindra & Mahindra reported a 25% rise in monthly dispatches. – Reuters tapped Kevin Warsh to head the US central bank. The president said the former Morgan Stanley investment banker and Fed governor “will go down as one of the GREAT Fed chairmen, maybe the best”. Traders regard Warsh as the toughest inflation fighter among the final candidates, raising expectations of monetary policy that would underpin the greenback. The choice also eased concerns about the Fed’s independence following a series of attacks on incumbent Jerome Powell over his reticence to cut rates as quickly as the president wanted. The dollar surged, having plunged most of last week on concerns the White House was happy to see it weaken. The Warsh announcement sent dollar-priced precious metals plunging on Friday, with gold losing as much as 12% and silver more than 30% at one point. And the losses mounted yesterday, with gold shedding as much as 10% to touch just below US$4,403, while silver briefly lost around 12% to US$75. That left them well down from their record highs of US$5,595 and US$121 touched last week. “The question everyone is now asking is what happens next?” said Pepperstone’s Michael Brown. “Here, I would flag that in a similar manner to the rally seen in recent weeks, there is now a solid argument that the pullback has also run ‘too far, too fast’.” – AFP

proposals publicly. “If the companies are not going to do it, then we’re back to square one,” said William Yuen, a Hong Kong-based investment director at Invesco, which manages nearly US$2.2 trillion. “I think we really need to see a little bit more on the actual execution and imple mentation. Otherwise, I think the overhang (for markets) will remain.” For the bond market, popular spending programmes on school lunches and defence are putting pressure on debt limits that have held firm since the financial crisis, which is troubling to investors. Indonesia's budget deficit is low in global terms, but at 2.92% last year it is uncomfortably close to the statutory cap of 3% and investors would like to see that held. “A lot depends on how policy is conducted in the next few months,” said Johnny Chen, portfolio manager at William Blair. “We need to see policy being conducted in a very credible manner that suggests that fiscal discipline and central bank credibility that we’ve been so accustomed to will continue.” To be sure, Indonesia is running large trade surpluses and has an ample US$156.5 billion in foreign exchange reserves. Wholesale capital flight or a sudden downgrade to frontier status are prospects that are regarded as unlikely. Still, momentum can be a dangerous thing in markets. “That orthodoxy that Indonesia has followed since the Asian Financial Crisis is something which is positive ... I think emerging market equities and bonds investors appreciated that,” said Rajeev De Mello, Singapore-based chief investment officer at GAMA Asset Management, who is underweight on the currency, stocks and bonds. “There is a perception that it’s weakened, that commitment to it is weakening.” – Reuters

strongman era when he cut his teeth. He has expanded military spending and its involve ment in the government. On the economic front, he appointed his nephew to the central bank's board last month and in September, he fired Sri Mulyani Indrawati, his respected finance minister. The rupiah hit a record low of 16,985 against the dollar in January and its decline stands out against surging markets in Peru and Brazil, as well as a broader enthusiasm for emerging markets. “The music is definitely darkening,” said Alan Siow, co-head of emerging markets corporate debt at fund manager Ninety One. Foreign investors net sold almost 14 trillion rupiah (RM3.29 billion) worth of Indonesian stocks in 2025, the heaviest year for outflows since 2020, and offloaded another US$783 million in January, according to LSEG data. Foreigners net sold about US$6.4 billion in Indonesian bonds last year. Copley Fund Research, a firm tracking the positioning of 356 active global emerging market funds, found the number of funds that opted to invest in Indonesian stocks fell 7.6% last year and the number of funds that were “overweight” fell more than 17% – the largest single negative country change on both counts. At issue in the equity market is a practice brokers have dubbed goreng-goreng saham or stock frying – where trading between related parties pumps up a stock’s price. To address it, authorities have proposed expanding disclosure requirements for big shareholders, while doubling the “free float” or tradable shares of listed companies to 15%. But that requires companies to shake out their share registries to get more stock into the market. Investors have welcomed the gestures, but they worry that it might not satisfy MSCI, which has frozen Indonesian securities in its products and has not responded to the

SINGAPORE/LONDON/JAKARTA: A stock market collapse is only the latest sign of trouble for Indonesia's capital markets, which are being excluded from a rush to emerging economies, as investors cool on Southeast Asia's biggest country and President Prabowo Subianto's economic agenda. Indonesia's equity bourse has lost almost 12%, or more than US$80 billion (RM315 billion) in value, since index provider MSCI warned last week that the country risked a downgrade to frontier status due to problems with ownership and trading transparency. Vows to make changes and the resignations of five top officials from the financial regulator and stock exchange have failed to stabilise the market – and a struggling currency points to a deeper malaise. Investors have been avoiding Indonesia and worry Prabowo's spending and cosy governance are slowly undoing hard-won progress made since the Asian Financial Crisis, when the rupiah collapsed. Foreigners own barely more than 13% of the bond market, down from nearly 40% as recently as 2019, according to government data. They have left gradually, but the latest hit to confidence is particularly ill-timed because - as US rates fall – global money is pouring into emerging markets at a record clip and sending stocks and currencies in Latin America soaring. Prabowo, meanwhile, has been remaking the country in ways that are reminiscent of the o Global investors cool on country with economic direction and practice of ‘stock frying’ among issues Investors resumed Friday’s rollercoaster ride as they assessed geopolitical developments, the latest batch of company earnings and the outlook for US interest rates. After a strong January fuelled by artificial intelligence bets, stocks went into reverse last week as traders again questioned the wisdom of the vast sums pumped into the sector and when they will see returns. That has also raised fears of a tech bubble that could soon pop. The latest round of selling came after Microsoft announced a surge in spending on AI infrastructure, reviving concerns companies could take some time before seeing a return on their investments. Seoul, which has hit multiple records this year thanks to its big tech weighting, plunged more than 5%, with chip giant SK hynix shedding 8% and market heavyweight Samsung off more than 6%. Tokyo, also home to several big-name tech firms, shed more than 1%, as did Taipei, where chip giant TSMC is listed. Hong Kong, Shanghai, Sydney, Singapore, Wellington, Manila and Bangkok also tumbled. London, Paris and Frankfurt opened lower.

Stocks, oil, precious metals plunge in volatile start to week HONG KONG: Equities, oil and precious metals plunged yesterday to extend the volatility that struck markets at the end of last week, with concerns about elevated tech valuations once again casting a shadow.

A currency dealer reacts as she monitors rates in a foreign exchange dealing room at the Hana Bank headquarters in Seoul yesterday. South Korea’s stocks benchmark index Kospi tumbled more than 5%, in line with a sell-off across Asian markets. – AFPPIC

Both main crude contracts shed more than 5% at one point as US President Donald Trump said he was hopeful of reaching a deal with Tehran after it warned that any attack on the Islamic republic would trigger a regional conflict. Oil’s drop was helped by a stronger dollar, which came on the back of news that Trump had

Jakarta tanked more than 5%, extending last week’s rout after index compiler MSCI called on regulators to look into ownership concerns and a warning it would hold off adding Indonesian stocks to its indexes or increasing their weighting. Oil prices plunged on easing US-Iran tensions.