ILLUSTRATION. Reflection of the screen of the movement of the Jakarta Composite Index (IHSG) at the Indonesia Stock Exchange, Jakarta. BETWEEN PHOTOS / Puspa Perwitasari / wsj.
Reporter: Kenia Intan | Editor: Herlina Kartika Dewi
KONTAN.CO.ID – JAKARTA. After being depressed by 7.03% throughout September 2020, the Composite Stock Price Index (JCI) strengthened 5.30% throughout October 2020. Just so you know, JCI trading in September 2020 closed at the level of 4,870.04. While in October, it was closed at 5,128.23 levels.
Head of Research at NH Korindo Sekuritas Indonesia, Anggaraksa Arismunandar, explained that the increase in the JCI was supported by the strengthening in the first two weeks of October 2020. The positive sentiment came from the ratification of the Omnibus Law on Job Creation.
“Quite a few have rules that are favorable for the investment climate, such as ease of doing business, land permits, and dividend taxation rules,” he explained to Kontan.co.id, Wednesday (28/10).
He further explained that the easing of the status of Large-Scale Social Restrictions (PSBB) to become a transitional PSBB was another positive catalyst. As for the end of October 2020, the JCI tends to move sideways. However, it is also seen that foreign investors have started net buying or net buy.
Also Read: The US election colored the IHSG movement in early November
Anggaraksa explained, in November 2020 the JCI has the potential to experience a correction. Reflecting on the past 10 years, the JCI was recorded to have weakened eight times in November.
Apart from that, from global perspective, investors’ focus will be on the general election (election) for the president of the United States (US). Meanwhile, from domestic, the JCI will be affected by the release of GDP data and financial reports of issuers for the third quarter of 2020.
Anggaraksa estimates that if the market tends to be tinged with negative sentiment, the JCI could be under pressure to the level of 4,930 throughout November 2020. If the market is colored with positive sentiment, the JCI could move up to the level of 5,350.
“For long-term investors, if there is a correction in November, it can be used as a moment for accumulated purchases,” he advised.
Some of the stocks that were still attractive this November were big caps stocks in the consumer goods sector such as ICBP, KLBF, and UNVR. From the banking sector can be considered for BMRI and BBNI.
In addition, investors can also observe mining issuers that routinely distribute interim dividends such as ITMG and ADRO.
Towards the end of the year, generally there will be action window dressing which raised the JCI in December. So that the end of this year JCI is expected to close at the level of 5,400.
Meanwhile, Philip Sekuritas analyst Anugerah Zamzami Nasr argues, there is still a chance for the JCI to strengthen in November, although it is not as strong as October 2020. Investors will look at Indonesia’s macro data such as the third quarter GDP and data in October such as PMI, IKK, and inflation. .
“To see how fast the economic recovery is entering the fourth quarter of 2020,” he explained, Thursday (29/10).
As for the US election, according to him, it will have an indirect impact through movements on Wall Street in the short term. However, there has been no direct political impact on Indonesia. The political impact is most likely indirect through the US policy to China after the election.
The sectors that are attractive in November are the banking, pharmaceutical, and consumer goods sectors. This sector can be observed because it is in line with the gradual improvement in the economy. Apart from that, the sector cyclical such as agriculture can also be considered as prices have improved and demand has increased in recent years. The property sector can also be watched as the economy opens.
Zamzam predicts the JCI will resistance at levels 5,180, 5,230 and 5,320. Meanwhile the level supportit is at 5,100 and 5,060. As for the end of 2020, the JCI is still expected to be lower than last year.
“Our prediction is at 5,400 to 5,550, equivalent to 17 to 19 times the forward P / E, assuming a decline in EPS of 15%,” he concluded.
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