Jakarta, CNBC Indonesia – The national stock market has strengthened this week, supported by foreign buying amidst optimism for Indonesia’s economic growth this year.
The Composite Stock Price Index (JCI) on Friday (25/3/2022) weakened 0.67% or 47.15 points to 7,002.532. However, in a matter of a week, the JCI rose 0.68% or 47.57 points compared to last weekend’s closing position at 6,954,965.
The weekly rally continued the strengthening that was printed the previous week by 0.47% or 32.36 points. The JCI movement this week was special because it managed to record an all-time high,
Even though it managed to set a record, the JCI movement was not very smooth. In 5 trading days this week, the main reference index of the national stock exchange strengthened for only 2 days, namely Monday, Tuesday and Thursday. The biggest rally occurred on Thursday, at 0.77%.
Starting the week, the JCI closed up 0.216 points (+0.00%) to 6,955.18 on Monday. JCI closed slightly higher amid plans by the US central bank (Federal Reserve / The Fed) to raise the benchmark interest rate to the level of 1.9% in 2022 which the market began to digest.
The positive trend continued on Tuesday, until the main benchmark index of the national stock exchange closed at 7,000.82, which is the closing price in history. Foreigners are observed to be net buy jumbo. Foreign inflows were recorded at Rp 805 billion in the regular market.
The next day, JCI “rested”. The national stock market edged down 0.07% and fell to below 7,000 on Wednesday. Precisely closed at 6,996,115. The JCI weakening was accompanied by a statement by the Fed’s boss, Jerome Powell, who said that inflation in the United States was too high and could jeopardize the economic recovery.
Therefore, Powell emphasized that he will continue to raise interest rates until inflation is under control, even if he does not rule out an increase of 50 basis points.
In trading on Thursday, JCI “revenge” and shot to reach the highest record ever touched in history. Along with the JCI which set a record, foreigners also bought up Indonesian shares with a jumbo net buy of Rp 1.71 trillion in all markets.
Investors are increasingly optimistic about spending their investments in leading stocks amid a speech by President Joko Widodo (Jokowi) who stated that Indonesia’s economic foundation is getting stronger, despite global challenges and uncertainties. Plus this year’s Lebaran homecoming is re-opened, with vaccination and booster requirements.
Unfortunately, on the last trading day of this week, the JCI slumped but still at the psychological level of 7,000.
After all, the JCI has strengthened 6.4% throughout 2022 (year-to-date/YTD), so the JCI correction in trading this weekend is considered reasonable.
Optimism for Indonesia’s solid economic recovery in 2022 amid uncertainty is the reason foreign investor funds continue to flow and support the JCI.
The World Monetary Fund (IMF) projects that the Garuda economy will grow 5.4% annually (year-on-year/yoy) this year. This estimate is more optimistic than the government which estimates the economy to grow 5.2% (yoy).
Indonesia’s economic growth is supported by the opening of the economy after the control of the spread of the corona virus (Covid-19) in Indonesia. In addition, high world commodity prices have increased the country’s foreign exchange coffers through exports.
However, there is still pressure on sentiment amid the agenda of the President of the United States (US), Joe Biden, to meet with the leaders of the North Atlantic Treaties Alliance (NATO) in Brussels, Belgium in an emergency meeting.
It is feared that the protracted conflict and war of sanctions will throw the world economy into a recession, which will especially hit countries with economies that have not yet grown rapidly, such as Indonesia.
(ras/ras)
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