Jakarta, CNBC Indonesia – At the beginning of 2023, it seems that it will not be able to provide fresh air to the country’s financial market. The Composite Stock Price Index (IHSG) and the rupee exchange rate fell simultaneously.
During trading on Thursday (5/1/2023), the JCI fell 2.7% to 6,653. The selling pressure hit 518 stocks, including large-cap stocks.
However, in session I today, Friday (01/06/2023) at 09:27 WIB, the JCI strengthened by 0.35% to 6677.26.
Meanwhile, the rupee’s exchange rate against the US dollar weakened in 4 trading days, depreciating by 0.26% to a level of IDR 15,605/US$ in today’s Friday (6/1/2023) trading.
The rupee has become a currency that has weakened on its own against the currencies of neighboring countries such as Malaysia and Thailand.
Some major Asian currencies managed to strengthen, for example the Malaysian ringgit, which strengthened by 0.34%. The Thai baht became the most impressive performing currency, gaining 1.65%.
So what happened to Indonesia?
BCA Chief Economist David Sumual explained that investors are currently looking at cheaper valuations on Asian stock exchanges such as China and Korea.
“There is a repositioning of global fund managers. Especially China after the reopening of its economy. Even if there are new attacks of Covid-19 which are on the rise. Meanwhile in Indonesia it has been priced in terms of valuations” David explained to CNBC Indonesia on Friday (6/1/2022).
Another issue that also caused the Indonesian JCI to burn down was because China was known to import coal directly to Australia.
The sentiment of ordering coal from China to Australia has questioned the quality of Indonesian coal. As a result, the shares of the domestic coal sector have also declined.
“Overall, since the end of last year, China’s capital market has started to increase, including Hong Kong. Asian capital markets have tended to be stagnant, including ours, which has tended to decline,” said David.
The movement of stocks, David said, also depends heavily on the global economy, especially looking at Central Bank policies in the United States (US).
Capital markets in many countries are also currently tending to consolidate rather than recover.
The Fed’s interest rate hike should be slower, and they will ease, or even cut interest rates at some point, if there are problems that the market can’t predict.
“The US index is also down. […] The relationship with the Fed could start to reverse in the second half of 2023, monetary policy will be more flexible,” said David.
“That’s why investors are also starting to be careful in the capital market and perhaps look for other instruments,” David said again.
