Stock Index Slumps after Prabowo Statement
22 July 2014 20:00 WIB
TEMPO.CO, Jakarta – Prabowo Subianto’s statement rejecting the presidential election process has resulted in profit-taking actions among market makers. As a consequence, the Indonesian Composite Index (IHSG) slumped by 1.5 percent.
First Asia Capital’s Analyst David Nathanael said the IHSG had undergone a significant rally and it was about time to be corrected. The overpriced stocks are now returning to their normal prices.
“Market Makers use the momentum to generate profis,” David said.
According to David, the stock index hike to 5,100 was triggered by presidential election sentiments. He said when there was a negative sentiment from the election, the index would weaken.
Furthermore, foreign investors sold their stocks today since Prabowo’s statement had increased uncertainty in the market. David said the political situation was simmering so that it would be a good time to sell the stocks.
PDAT | M. AZHAR
