Foreign investors Fuel Indonesian Stock Market dip
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Jakarta, Indonesia – Foreign investors continued thier selling spree on the Indonesian Stock Exchange (IDX), unloading a net IDR 473.9 billion (approximately $30 million USD) worth of shares on Wednesday, December 18, 2024. This latest wave of selling further erodes the year-to-date net foreign buy, reducing it to IDR 17.2 trillion. The persistent outflow raises concerns about investor sentiment towards the indonesian market.
The sell-off was especially pronounced in banking stocks. Shares of PT Bank Central Asia Tbk (BBCA), one of Indonesia’s largest banks, experienced the most notable net sell, with foreign investors offloading IDR 343.6 billion. This surpasses the recent trend of heavy selling in PT Bank Rakyat Indonesia Tbk (BBRI) shares,which still saw a ample net sell of IDR 266.4 billion on Wednesday. PT Bank Mandiri Tbk (BMRI) also saw significant foreign selling, with a net sell of IDR 141.3 billion.
While the majority of the market experienced net selling, PT Petrindo Jaya Kreasi Tbk (CUAN) bucked the trend, with a relatively small net buy of IDR 29 billion. Though, this positive movement was overshadowed by the overall negative sentiment.
The Jakarta Composite Index (IHSG), Indonesia’s main stock market index, reflected the negative investor sentiment, falling 49.85 points (0.7%) to close at 7,107.8. This marks five consecutive days of decline, a reaction likely fueled by the government’s continued implementation of a 12% Value Added Tax (VAT).
Market activity was robust, with a total transaction value of IDR 11.05 trillion and a trading volume of 16.88 billion shares. However, the overall picture was one of decline, with 381 stocks falling compared to 211 stocks rising, and 199 remaining unchanged.
Most sectors experienced losses. The transportation sector suffered the most significant decline at 1.2%,followed by infrastructure (-0.8%), raw materials (-0.6%), finance (-0.5%), and primary consumer goods (-0.5%). The only sector to show growth was non-primary consumer goods, with a modest increase of 0.4%.
The continued foreign selling and the decline in the IHSG raise questions about the future trajectory of the Indonesian stock market and its potential impact on the broader indonesian economy. Analysts will be closely watching for signs of a market turnaround or further declines in the coming days and weeks.
Editor: Jahari Mahardhika (jauhari@investor.co.id)
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foreign Investor Sell-Off Fuels Concerns in Indonesian Stock Market
Jakarta, Indonesia – Foreign investors continued their selling spree on the Indonesian Stock Exchange, raising concerns about the health of the market and its potential impact on the broader Indonesian economy. This article delves into the implications of this outflow with Dr. Anita Wijaya,a leading economist specializing in Southeast Asian markets.
Foreign Sell-Off Intensifies
Jahari Mahardhika: Dr. Wijaya, we’ve seen a sustained outflow of foreign investment from the Indonesian Stock Exchange. What are your key takeaways from this recent sell-off?
Dr. Anita Wijaya: The selling trend is indeed worrisome. On December 18th alone, we saw a net outflow of IDR 473.9 billion, pushing the year-to-date net foreign buy down to IDR 17.2 trillion. This signals a decline in investor confidence, potentially driven by both global and domestic factors.
JM: Are there any specific sectors that have been hit especially hard by this outflow?
AW: Banking stocks have been considerably affected. Major players like Bank Central Asia (BBCA), Bank Rakyat Indonesia (BBRI), and Bank Mandiri (BMRI) have experienced major net selling. This is concerning because a strong banking sector is crucial for overall economic stability.
JM: Why might the banking sector be particularly vulnerable right now?
AW: Several factors could be at play. global economic uncertainty,rising interest rates,and concerns over potential credit risk in Indonesia could be making foreign investors cautious about their exposure to Indonesian banks.
Market Performance and Government Policies
JM: The jakarta Composite Index (IHSG) has also been declining. Is this decline directly linked to the foreign sell-off?
AW: Undoubtedly, the sell-off is a contributing factor. We’ve seen five consecutive days of decline, likely fueled by investors reacting to both the foreign outflows and the government’s continued implementation of a 12% Value Added Tax (VAT).
JM: What are your thoughts on the potential impact of the VAT on the Indonesian market in the long term?
AW: The VAT is a complex issue. While it aims to increase government revenue, there are concerns it could dampen consumer spending and, in turn, impact corporate earnings.
Looking Ahead: Navigating Uncertainty
JM: What are some potential scenarios we might see in the coming weeks or months regarding the Indonesian stock market?
AW: The situation remains volatile. A lot will depend on macroeconomic factors both domestically and globally.
We could see a market turnaround if investor confidence is restored. This could be influenced by positive economic indicators, policy changes that address investor concerns, or a general betterment in global sentiment.
However, continued foreign selling and negative economic news could lead to further declines, putting pressure on the Indonesian rupiah and potentially impacting investment inflows into the country.
JM: Thank you for your insights, Dr. Wijaya.
AW: You’re welcome. I believe it’s crucial to monitor the situation closely and be prepared for different scenarios.
Editor:
Jahari Mahardhika (jauhari@investor.co.id)
