…global investors always sound positive towards Indonesia,
Jakarta (MidLand) – The five-year democratic party that gave the Indonesian people the chance to elect popular representatives, as well as the new president and vice president, has ended, but the euphoria continues in various sectors, including the capital market.
On Thursday morning (2/15), or the day after the election, the Composite Stock Price Index (IHSG) opened higher by 127.89 points, or 1.77%, at 7,337.63. The index also closed higher by 93.54 points or 1.30% at 7,303.28 compared to the previous close.
Meanwhile, on Friday (16/2), which was H+2 of the vote, the JCI opened 42.30 points or 0.58% at 7,345.58. Meanwhile, in the closing session, JCI rose 32.26 points or 0.44% to 7,335.54.
LPEM FEB Teuku Riefky, macroeconomic and financial markets economist at the University of Indonesia, said that the strengthening of the stock market index used by the Indonesian Stock Exchange (EIB) was influenced by the results of quick calculations or fast counting presidential elections by various polling institutes.
It does not matter who wins the political competition, but as long as there is a prediction of the election results, this can trigger a strengthening of the JCI because investors who initially chose to wait and see or wait and seethey are now starting to be able to determine the direction of their investment.
This shows that the smooth conduct of elections can increase investor confidence, which can bring tailwinds to the market.
Capital Market Observer e Trainer PPA FEB University of Indonesia Budi Frensidy said that although there is more dynamism in the Democratic Party this time, the market will always react positively if the elections run smoothly, just like previous elections.
Looking at the JCI movement data every time direct presidential elections were held from 2004 to 2019, the performance of the stock index tends to improve after the elections.
Indonesia Stock Exchange (EIB) Development Director Jeffrey Hendrik also said that despite the democratic party in Indonesia this year, investors still believe in the country’s economic potential.
This is because the main concern of investors are fundamental issues, i.e. those related to the national economic situation and the profile of companies whose shares are listed on the IDX.
“When we did it roadshow going abroad to meet global investors, they always pass on tone “The (tone) is positive about Indonesia,” he said.
Maybe change
Although there was a positive trend of JCI strengthening for 2 days after the elections this year, the election phase is not over yet and this could still have an impact on the movement of the stock index.
Until next month, when the winner of the 2024 presidential election is announced on March 20, Riefky said market sentiment could still change.
This is due to the results fast counting investigative institutes are not absolute results of presidential elections. The KPU still needs to complete several procedures before announcing the new leader chosen by the people.
Beyond that, many dynamics are still occurring in society in response to the rapid counting results announced by several research institutes on the same day as the presidential election, February 14.
According to Riefky, development day to day The domestic political situation will still strongly influence investor sentiment, especially those from abroad, so capital inflows are still relatively unpredictable.
Meanwhile, Budi Frensidy added that in addition to political developments and the announcement of the winner of the presidential elections by the KPU, market sentiment was also influenced by the new government formed subsequently.
If the composition of the cabinet is in line with market expectations, this will have a positive impact on the stock market.
It seems that until there is a final decision from the KPU and the new government is not yet fully formed, market sentiment will not be completely stable.
Stay optimistic
Investor concerns about the impact of political year dynamics on the capital market emerged well before the 2024 general and presidential elections.
IDX noted that in 2019 the number of investors only reached around 2.5 million, while now that figure has jumped to 12.1 million. This means that approximately 9.6 million new investors have been added in the last 5 years.
“This is their first election as an investor. Obviously feelings nervous (worried) “Maybe there is,” Jeffrey Hendrik said.
This is what prompted the party to organize the Capital Market Summit & Expo 2023 from October 26 to 28 with “Investors as Winners in the Political Year” as the main theme of the seminar and “Investors’ Ways to Pursue Profits in the Political Year political” as the main theme. topic of discussion market prospects.
At this event, IDX invited experienced investors who have faced market turbulence during five or six presidential elections and managed to survive so far, to share their experiences with new investors.
It is certainly hoped that this effort will spark optimism and maintain the enthusiasm of these new investors.
Besides that, EIB is also trying to continue to increase investor interest in the Indonesian capital market by transforming itself into a stock exchange multi-asset which can offer investors greater product choice. Furthermore, Indonesia has prospects of developing the sharia capital market.
IDX has so far developed several equity products, fixed income investmentsstructured warrants, derivative products and carbon exchange products.
Now the stock exchange is also preparing several new regulations to give more space to investors to realize their investment strategies.
In this way, the Indonesian capital market is expected to continue to grow with an increase in total transactions in the context of the dynamics of the political year where everything is still possible to change.
Publisher: Achmad Zaenal M
Copyright © MidLand 2024
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