Jakarta, CNBC Indonesia – Dropping badly at the start of the week due to the selling action of foreign investors amid the risk of losing the momentum of annual economic growth in Indonesia following the policy of banning homecoming, the national stock market this week has fallen by more than 1%.
The Composite Stock Price Index (JCI) weakened in the first three days and only reduced the rate of correction in the last two trading days. Cumulatively, the stock exchange benchmark index fell 1.14% (69.39 points) from 6,086.26 at the end of last week to 6,016,864 on Friday (24/4/2021).
After three consecutive days of corrections since the first trading day of this week, the JCI, which was thrown to the psychological level of 5,900 on Wednesday, finally strengthened on Thursday after the government changed its policy tone, from ‘banning homecoming’ to ‘tightening homecoming’.
This is only natural because fasting and Eid have historically been momentum driving the consumption of Indonesian society. As a country where 57% of its Gross Domestic Product (GDP) comes from household spending, fluctuations in the level of public consumption will determine the rate of national growth.
Bank Indonesia (BI) has on several occasions mentioned that the annual homecoming routine helps the circulation of money of up to Rp 150 trillion to regions throughout Indonesia. The need for money in circulation always increases before these two important moments of the Muslim community.
Data from the Indonesia Stock Exchange (IDX) states that this week the depressed index is related to the ban on going home and the decline in public consumption, such as the basic industrial sector (-3.07%), infrastructure (-1.51%), trade (-1.68 %), and consumers (-1.43%).
The trading value during the week was recorded to have shrunk by more than Rp. 5 trillion to Rp. 43.4 trillion, with only 77 billion shares changing hands, as many as 4.5 million times more. Foreign investors still book net sales (net sell), worth Rp. 1.09 trillion.
This massive foreign sale occurred despite the yields (yield) the 10-year US government bond continued to slope to the level of 1.5%. The high yield in the 1.7% range raised concerns over policy quantitative easing gets braked, which triggers capital outflow.
If the yield decreases, however capital outflow This is still happening like this week, so the trigger is more due to negative factors originating from developing countries, such as in India, which has recorded a spike in Covid-19 cases recently, or from Indonesia, which, although the Covid-19 case is sloping, there is a risk of losing the Eid momentum in Indonesia. economy.
CNBC INDONESIA RESEARCH TEAM
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