ILLUSTRATION. Employees pass under the screen of the Composite Stock Price Index (CSPI) at the Indonesia Stock Exchange building, Jakarta, Wednesday (5/20/2020). In the past week, JCI was up 1.16%.
Reporter: Ika Puspitasari | Editor: Wahyu T. Rahmawati
KONTAN.CO.ID – JAKARTA. Composite Stock Price Index (IHSG) slipped at the end of trading Friday (10/7). The Jakarta Composite Index closed down 0.43% to 5,031.26 at the end of last week. However, in the past week, the Jakarta Composite Index rose 1.16%.
Then, what is the projected movement in the JCI at the Board of Governors’ Meeting (RDG) of Bank Indonesia (BI)?
Head of Research Analyst at FAC Sekuritas Wisnu Prambudi Wibowo believes that market participants predict BI will still maintain the benchmark interest rate in the RDG next week. Because BI has cut its benchmark interest rate last month.
Read Also: Interest rates are expected to remain constant, see predictions for JCI
In RDG June 2020, BI decided to reduce the benchmark interest rate or 7 Days Reverse Repo Rate (7DRRR) by 25 basis points from 4.5% to 4.25%. Despite predicting fixed rates, with June inflation data still low BI has the opportunity to cut interest rates back to the level of 3.75% to 4%. Which, with a decrease in interest rates, could be one of the drivers of the economy being sluggish.
According to Wisnu, the sentiment related to setting the BI benchmark rate is quite neutral for trading next week. Because, there are many other factors that can affect the movement of the JCI.
“The issue of interest rates is not just a factor that tends to drive the JCI, there are external factors, for example the development of Covid-19 globally and the development of vaccines,” he said when contacted by Kontan, Sunday (12/7).
Read Also: JCI has the potential to go down on Monday (13/7), following Binaartha Sekuritas’s preferred shares
In addition to waiting for BI RDG results, he sees market players will also look at the performance of the second quarter issuers which are projected to be more depressed than the first quarter of this year in line with the implementation of the PSBB. He said, this could exacerbate the rate of CSPI next week.
Furthermore, a number of domestic economic data releases will also color the index movement next week. “On Monday there is a report on business activities, which are also indicators and how much they have recovered,” he added.
Followed on Wednesday (7/15) there was an announcement of the trade balance for the June 2020 period and the results of a banking survey that also influenced the movement of the JCI. No less important about the release of Indonesia’s foreign debt statistics in May 2020 on Friday (7/17).
Wisnu predicts JCI movement will tend to be depressed next week with a range of 4,920-5,100.
Read Also: JCI has the potential to strengthen a week ahead, looking at a number of economic data releases
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