Experts deem the correction of the JCI to still be within reason, pointing out that the Indonesian index compares favorably to indices of foreign markets. The JCI closed down 0.17 percent at 6,200 points on Monday.
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Kompas
Stock prices are displayed at the Indonesia Stock Exchange (IDX) in Jakarta on Monday (26/3). The Jakarta Composite Index (JCI) has not recovered from pressure, as it dropped 0.17 percent to close the day at 6,200.17 points.
The Jakarta Composite Index (JCI) has weakened by 2.45 percent since the beginning of the year. This weakening, triggered by global conditions, is still considered to be reasonable.
JAKARTA, KOMPAS – Experts deem the correction of the Jakarta Composite Index (JCI) to still be within reason, pointing out that the Indonesian index compares favorably to indices of foreign markets.
The JCI closed down 0.17 percent at 6,200 points on Monday (26/3/2018), after fluctuating between 6,167 and 6,205.
Since the beginning of the year, the JCI has weakened by 2.45 percent. In the ASEAN region, the Philippine stock market suffered a deeper correction, falling by 7.31 percent.
Kresna Sekuritas senior research analyst Franky Rivan said the JCI correction in the past month was still reasonable. The decrease in stock prices in Indonesia not as sharp as in other countries in the global market, including the US, Japan, China and the eurozone.
A number of analysts have predicted that stock prices will bounce back this week. Franky said he was optimistic that the JCI would regain its strength, driven by a positive performance of the national economy and of listed companies.
Thus far, the JCI’s weakening has been caused more by global economic developments, including concerns about a trade war between the US and China.
Global economic perspectives are driving a number of investors to divert their assets from the capital market to either the obligation market, the gold market or the Japanese yen market.
Last week, foreign investors sold stocks worth Rp 3.55 trillion (US$259.15 million). Over the past month, net sales of foreign investors reached Rp 13.85 trillion.
Not affected by politics
Indonesia Stock Exchange (IDX) president director Tito Sulistio said the domestic political constellation had no effect on the country’s capital market. Profit at 33 of 45 companies that have reported their financial performance to IDX grew by an average of 21 percent.
This year, market capitalization is targeted to grow by between 20 percent and 25 percent.
“It is dangerous only when both the JCI and companies’ performance are poor. This may lead to a crisis, as was seen in 1998,” Tito said.
Weakening also occurred in a number of stock exchanges across Asia. To attract domestic investors, IDX has opened 346 so-called investment galleries and is partnering with 390 young investor communities. IDX is also trying to accelerate the transaction time for stocks in the capital market from three days to two days.
The rupiah exchange rate, based on the Jakarta Interbank Spot Dollar Rate (Jisdor) reference rate, was Rp 13,776 per US dollar on Monday, a minor increase from Rp 13,780 per US dollar on Friday.
Citibank NA Indonesia CEO Batara Sianturi said high volatility in the global financial market would only be temporary. Despite its relative insignificance, it still affects Citibank Indonesia’s performance, especially on obligation and stock markets.
In January, obligations managed by Citibank recorded a positive position with Rp 33 trillion, but in February and March it was respectively negative Rp 21 trillion and negative Rp 6 trillion. As a whole, it was still positive between January and March in 2018.
“[As for the equity market], there was a decrease from January to March, or a negative performance. It [grew by] US$130 million in January, [fell by] $750 million in February and [by another] $800 million in March,” Batara said.
Batara noted that the weakening of the rupiah against the US dollar also affected the stock market and the bond market.
