Foreigners have entered IDR 5 T, IHSG can be 6,000 more

Jakarta, CNBC Indonesia – The Financial Services Authority (OJK) revealed that the performance of the country’s capital market began to improve with foreign capital flows, aka net buy, reaching Rp 5.23 trillion in the first week of November.

“There are signs of credit growth [bank] positive, which from March contracted. Then the positive sentiment in the capital market, [IHSG] already through 5,509.5, “said Chairman of the OJK Board of Commissioners Wimboh Santoso at the DPR Building, at the Hearing Meeting, this Thursday (12/11/2020).

“This positive sentiment effort in the capital market is a reflection of fundamentals that will be better with joint fiscal, monetary and financial policies,” said the former Head of Bank Indonesia Representative in New York, USA.

“Although it has not recovered before March, the flow of foreign funds has entered the stock market at Rp 5.23 trillion [awal] November, which previously experienced a net sell, “he explained.

Wimboh also conveyed that the recovery was also reflected in the government bond market, where the yield or yield on 10-year government bonds (SUN) was at the level of 6.7%, down from the previously high 6.97%. The decline in yield is a positive sentiment as SUN prices have increased.

In terms of raising funds on the capital market, or raising funds, they are still running. Wimboh explained that the latest figure has reached Rp. 97.7 trillion from 145 issuers. The number of fundraising comes from 44 new issuers through the IPO (initial public offering) mechanism.

As of December, he said, there were 33 issuers raising funds with an indication that the funds reached Rp 17.28 trillion.

Previously, Wimboh also said that various policies issued by the authorities to deal with the impact of the Covid-19 pandemic were projected to increase investor confidence.

OJK is also optimistic that the market can recover from the effects of this pandemic. Currently, the JCI position has returned to around 5,500, after touching its lowest point around 3,900 at the beginning of the pandemic, last March-April.

“Now that stocks are back above 5,000, we are sure that 6,000 can return to normal in the not too distant future,” said Wimboh in the Financial Sector Discussion Forum with the theme “Recent Financial Sector Conditions and Viewing the Economy 2021” held by CNBC Indonesia, Tuesday (10 / 11/2020).

“We already have various policies made, so we are sure that the policies implemented will recover,” said Wimboh.

Wimboh said the various extraordinary policies that have been issued by the OJK to deal with the impact of Covid-19 are beyond the usual capital market. This makes the impact of the decline in sentiment too responded negatively by the market.

He stated that extraordinary policies include purchasing shares of issuers without a GMS, limits on autorejection, and several other policies so that the decline is not too deep.

“We hope that various policies have been introduced to make investor confidence recover,” he said.

In addition, the presence of the Covid-19 vaccine produced by Pfizer and several which are in research, has given the business world confidence to rise from adversity during the Covid-19 pandemic.

“This is only a matter of time. So that entrepreneurs will certainly anticipate it early. Don’t miss the train, especially middle and upper class entrepreneurs, bounce back,” said Wimboh.

He emphasized that the financial sector currently has sufficient liquidity to support the needs of the business world. “If there are obstacles, please have a dialogue,” he said.

“This vaccine will also give the global economy growth. Exporters get benefits after previously exported goods fell drastically,” he added.

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