Jakarta, CNBC Indonesia – The decline in daily Covid-19 infection cases in the country has become a positive catalyst for the domestic stock market to accelerate until the end of this year.
The reason is, since the beginning of the year until August 26, 2021, the performance of the Jakarta Composite Index (JCI) has only strengthened 1.32% to a level of 6,058.08 points.
This achievement, in Southeast Asia, was only better than the Malaysian stock market, which fell 2.80% and the Philippines, which fell 4.47%. However, the performance of the Indonesian stock market still lost to the Singapore and Thailand markets, which rose 9.32% and 10.38%, respectively.
Head of Equity Trading MNC Sekuritas Medan, Frankie WP, said that the JCI is projected to have room to grow in the range of 6,100-6,500, towards the end of this year.
There are a number of positive sentiments that have pushed the JCI up, among others, since entering 2021, issuers have made adjustments to the performance of their respective companies during the pandemic, such as improving portfolios and efficiency.
According to him, this will encourage issuers on the IDX to boost their performance without waiting for the Covid-19 case to be completed, because there is no certainty when the pandemic will end.
“It is also felt that this will support Indonesia’s economic growth in the second semester, where Indonesia’s own economy has recovered from the recession,” he told CNBC Indonesia, Friday (27/8/2021).
Furthermore, the sentiment that is also observed is the concern about the effect of a taper tantrum that will undermine the capital market, and potentially restrain the JCI.
“This makes many investors still reluctant to strengthen their investment in the capital market, even though many stocks, especially bluechips and with good performance, still tend to be sluggish,” he explained.
Even so, Frankie continued, this taper tantrum sentiment has actually been buzzing for a long time, so that many investors and even the government already have plans to deal with this effect if it will happen, especially at the end of the year.
“So, the JCI still has a strong opportunity to grow, amid this taper tantrum sentiment,” he said.
Meanwhile, the CEO of Sucor Sekuritas, Bernardus Wijaya, revealed that the risk of the Fed’s tapering, which is planned to be carried out at the end of this year, is considered not to have a significant impact on the Indonesian stock market.
This is because, according to Bernardus, the composition of foreign investor ownership in the domestic stock market has dropped to 45% this year from the position in 2015 which still dominated at 65%.
In addition, in terms of daily transaction value, currently domestic investors have dominated the average daily transaction value on the Indonesia Stock Exchange (IDX).
“Foreign ownership is already quite thin from 65% in 2015, now it is reduced to 45% or 20% less. Thus, the impact of tapering will not be as significant as in previous years, especially now that domestic investors are strong enough to support daily transactions and ownership,” ” said Bernard.
With these conditions, Bernardus is optimistic that the JCI has the opportunity to increase at the psychological level of 6,600 to 6,800 with sectors that will support the increase in the JCI, including finance, blue chip stocks and shares in the technology sector.
“I estimate the JCI will be able to be in the range of 6,600 to 6,800 with the sectors that will lead the JCI movement at the end of the year are the financial sector, blue chip, and the technology sector which is one of the interesting ones,” he added.
(hps / hps)
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