Stock Market and Rupiah on the Rise

TEMPO.CO, Jakarta - Sinarmas Securities Head of Researcher Jeffrosenberg Tan, said that the decline in current account deficit could trigger positive sentiments on movements in the stock market. He estimated that until the end of the year, the stock price index will increase by 12-14 percent to approximately 5,100 points.

"The rupiah is also estimated to be at the level of Rp 11,000-11,500 per US dollar," Jeffrosenberg told Tempo on Monday, February 17, 2014. This can be achieved if the general elections goes smoothly and the elected president is favored by the market. "Both factors are the key to Indonesia's capital market condition in the future," he said.

Bank Indonesia announced that the current account deficit in the fourth quarter of 2013 significantly declined to US$ 4 billion or 1.98 percent of Gross Domestic Product (GDP). The figure was much lower compared to the initial prediction by Bank Indonesia and the deficit in the previous quarter, which was at US$ 8.5 billion (3.85 percent).

According to the central bank, the decline in the current account deficit was caused by the increase in trade surplus that originated from non-oil trade surplus and narrowing deficit in oil and gas trade balance.

Jeffrosenberg said that the Indonesian market was currently one of the best among the developing countries. In 2013, Indonesia suffered from economic slowdown with the rupiah depreciating by 20 percent. "Now it's the other way around, foreign capital that in 2013 went to Argentina and Turkey has now gone back to us. This is the positive sentiment towards our capital market," he said.

FAIZ NASHRILLAH | GALVAN YUDISTIRA