JCI is in the recovery phase, along with the drivers according to Mirae Asset Sekuritas

ILLUSTRATION. The monitor screen displays the movement of the Jakarta Composite Index (IHSG) on stock trading in Jakarta, Friday (6/11/2020). BETWEEN PHOTOS / Hafidz Mubarak A / wsj.

Reporter: Nur Qolbi | Editor: Tendi Mahadi

KONTAN.CO.ID – JAKARTA. PT Mirae Asset Sekuritas Indonesia sees the Composite Stock Price Index (IHSG) is currently in the recovery phase and will still move positively until the end of the year. In fact, for next year, Mirae predicts there is potential upside 15% compared to 2020.

This is in line with investors’ confidence that Indonesia’s economy will recover. The proof, economic growth in the third quarter of 2020 was recorded at minus 3.49% year on year (yoy), up from the second quarter of 2020 which was minus 5.32% yoy. Meanwhile for the fourth quarter of 2020, the consensus of economists at Bloomberg predicts that Indonesia’s economy will grow between 0% -1%.

What’s more, the government is aggressive in providing a Covid-19 vaccine next year. Hariyanto Wijaya, Head of Research at PT Mirae Asset Sekuritas Indonesia, assessed that the availability and distribution of vaccines to the Indonesian people is one of the keys to recovering the economy.

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Another factor driving the recovery of the JCI was the provisional results of the United States (US) presidential election (pilpres) which won Joe Biden. “Biden’s victory is expected by market players because he is considered to be able to provide certainty to the capital market in line with his more predictable policies, especially regarding trade relations with China,” Hariyanto said at the event. media gathering virtual, Friday (13/11).

This can be seen from the return of foreign funds to the JCI and emerging market others since November 4, 2020, the day after the US presidential election vote count. In fact, from the beginning of the year to October 2020, foreign investors have always made a record net sell.

Even so, this inflow of foreign funds is still in form passive manage fund or exchange traded fund (ETF), not yet in shape active manage by investors retail. “This can be seen by still a lot big caps purchased, especially bank shares, “said Hariyanto.

Also Read: JCI fell again until Friday afternoon, the seven-day foreign net buy rally stalled

Several other factors contributed to positive reactions from market players due to recent economic developments. For example, nickel and crude palm oil (CPO), which are predicted to increase due to the support of several factors.