Foreigners book a net buy of up to Rp 1.2 trillion a week, analysts said

Reporter: Akhmad Suryahadi | Editor: I knew Laoli

KONTAN.CO.ID – JAKARTA. Foreign investors have reversed direction from previously continuing to record net sells or net sales, but in the last week foreigners have been diligent in accumulating shares on the Indonesia Stock Exchange (IDX).

Throughout this week the Composite Stock Price Index (IHSG) has gained 4.04%. Simultaneously, foreign funds began to enter the stock market this week. It was recorded that net buy in all markets this week reached Rp 1.2 trillion.

However, this does not mean that the entry of foreign funds during this week indicates that foreign investors have started to accumulate in the stock market.

Analyst of Phillip Sekuritas Indonesia, Anugerah Zamzami Nasr, assessed that confirmation of the consistency of net inflow for several days is needed to conclude that foreigners are starting to accumulate.

Also Read: Behind the zeal of foreign investors hunting for shares on the IDX in the last few days

“But at least the foreign net inflow for the past two days is encouraging (convincing). And the same trend can be seen in other emerging market stock markets, such as the Philippines, Malaysia and South Africa, ”said Zamzami when contacted by Kontan.co.id, Friday (6/11).

Furthermore, Zamzami assessed that the factor driving the inflow of funds was not solely the uncertainty in the United States so that foreigners sought profits in emerging markets. Possibly, this influx of foreign funds is an expectation of an improvement in the economy and an increase in the business cycle in these countries. This has also made foreigners slowly take positions in emerging markets.

Another possibility is that the valuation on the Wall Street exchange is somewhat overstretched, thus making foreigners look for a market that is still lagging and is expected to start growing and improving its economic potential.

Also Read: IHSG went green last week, what about next week?