The Fed will do a tapering off, see the prediction of JCI movement in the future

Reporter: Nur Qolbi | Editor: Tendi Mahadi

KONTAN.CO.ID – JAKARTA. The United States central bank The Fed will reduce bond purchases or tapering off starting at the end of November 2021. In an announcement that took place Thursday (4/11) early in the morning, Fed Chair Jerome Powell said, bond purchases would be cut by US$ 15 billion per month from the current purchase value of US$ 120 billion per month.

On the other hand, the Central Statistics Agency (BPS) on Friday (5/11) reported that Indonesia’s economic growth in the third quarter of 2021 was 3.51%. year on year (yoy), lower than the growth in the second quarter of 2021 which reached 7.07% yoy. However, this position has improved when compared to the pace of the Indonesian economy in the third quarter of 2020, which was minus 3.49%.

In line with the announcement, the Jakarta Composite Index (JCI) did not show any significant movement. On Thursday (4/11), the JCI rose 0.52% to 6,586.44 and then slightly corrected 0.07% to 6,581.78 on Friday (5/11).

BCA Sekuritas analyst Achmad Yaki also said that the two announcements did not significantly affect the JCI’s future movements. The reason is, these two sentiments have been anticipated by market players so that they have price in to the current JCI.

Also Read: JCI is projected to continue its correction on Monday (8/11)

On the other hand, Yaki argues, these two announcements actually have a positive effect because they make the market direction clearer. Until the end of 2021, Yaki predicts, the JCI can rise again to the range of 6,700-6,850, from the position as of Friday (11/5) which was at 6,581.78.

“The sentiment is still related to the economic recovery, the recovery of people’s purchasing power, and the increase in commodity prices,” Yaki said when contacted by Kontan.co.id, Sunday (7/11).

Technically, MNC Sekuritas Analyst Herditya Wicaksana even saw that the JCI movement was currently in a phase of uptrend short to medium term. With a note, the JCI did not correct below the level support 6.480.

If the JCI falls and breaks the level support Thus, the JCI is still prone to correction first to 6,450-6,400. “However, if the JCI is still able to stay above that support, then we estimate that at the end of the year there is a chance to retest 6,687-6,800,” said Herditya.

Also Read: Still overshadowed by the release of GDP data, the JCI Monday (8/11) is projected to move sideways

Then, for 2022, Herditya estimates, the JCI has the opportunity to be higher than the end of 2021. Yaki also predicts that the JCI next year still has the potential to rise, although not too much. bullish, i.e. to the range of 6900-7,000

“JCI tends to still be bullish. This is driven by the potential for continued economic recovery, which makes foreign investment potentially increase next year,” said Yaki.