JCI Stumbles on Rupiah Correction
16 September 2014 17:06 WIB
TEMPO.CO, Jakarta – The Jakarta Composite Index (JCI) yesterday edged up 1.19 points (0.02 percent) to close at 5,144.90 bps. A relatively quiet floor saw a transaction value of Rp4.6 trillion with foreign net sales reaching Rp570 billion.
First Asia Capital analyst Ivan Kurniawan said the rupiah correction against the greenback limited the index from gaining. Investors, particularly foreign ones, opted to sell their shares portfolio to buy the dollar, which strengthened against major currencies like the euro and the yen—causing sell-off in regional stock markets.
Ivan said Indonesia's economic fundamentals are still slow. Coupled with the current account deficits, the condition raises an alarm for foreign investors to exit at any given time. Since the beginning of this year, the index gain has been supported by political expectations as opposed to economic fundamentals. "Indonesia is prone to experience a reverse flow of hot money," he said
Today the JCI is expected to move in the range of 5120-5180 bps with a horizontal trend. Investors are advised to avoid stocks affected by the rupiah correction such as banking, construction, retail, and consumers. Recommended stocks are those from sectors that benefited from the correction, including CPO shares and several listed mining companies'.
PDAT | M. AZHAR