Foreign Buys Prop Up JCI
21 July 2014 14:10 WIB
TEMPO.CO, Jakarta – Large amounts of capital inflows continue to shore up the Jakarta Composite Index (JCI), maintaining its rally. Reza Priyambada from the Indonesian Association of Securities Analysts (AAEI) said that although the index encountered sentiments holding back its movements, the index managed to extend its gain nearing the end of last week.
If the rally continues, Reza said, the index will be able to re-penetrate the 5,200-bps mark. "Foreign net buys managed to maintain JCI's positive rate."
Throughout last week, Reza said, over the last week, foreign buys only amounted to Rp2.51 trillion, down from the previous week's Rp9.47 trillion. The year-to-date total of foreign net buy as of last week reached Rp54.6 trillion.
A safe and democratic presidential election becomes a contributing factor to the high number of foreign investors in the domestic market. This factor is supported by the fact that the Election Commission's (KPU) vote recap is showing a number that does not differ much from quick count results—calling Joko Widodo-Jusuf Kalla as winners.
Today the index is expected to move between 5,058 and 5,150 bps. Technically, the JCI still has the potential to gain despite in a limited volume.
"The index could reverse direction if KPU's recapitulation does not meet investors' expectations or if the announcement is postponed. [After the announcement] there will be selloffs ahead of the long holiday," said Reza.
PDAT | M. AZHAR