Structural reforms take sometime. New growth engine, manufacturing, including mineral processing, will only been seen in more than five years. In the short-medium term, Indonesia still need recovery of commodities to support the State Budget and overall economic growth. Developments in the past two weeks were quite promising, but volatility remains out there.

The government sets a modest 5.3% GDP growth next year on lacklustre commodities. State revenues from tax and non-tax of natural resources (oil & gas, coal, minerals, palm oil, natural rubber) are set significantly lower next year due to prolonged weakness in the commodities.

Salim Ivomas (SIMP) and its subsidiary PP London Sumatra (LSIP) have just released their first half 2016 financials. Like peers, these companies suffered from falling prices and volume of palm oil and natural rubber. Prices fell from global supply-demand balance, while volume was hit by El Nino effects.

Indo Tambangraya Megah (ITMG), coal producer controlled by Banpu Plc (Thailand), is among the best performing stocks with 117% gain year-to-date as equity investors speculated on recovery of thermal coal market. Fundamentals of coal producers, including ITMG, in the first half, however, were still under significant pressures. ITMG, for example, reported 37.1% fall in net profit.