Analysts Cut 2014, 2015 Stock Index Target
22 December 2014 09:12 WIB
TEMPO.CO, Jakarta – A number of analysts and research institutes corrected their projections for the Jakarta Composite Index (JCI) level for the year-end and the beginning of 2015. The correction took into account the possibility that the Fed Rate and the BI Rate will be raised next year.
John Rachmat, chief researcher and equity strategist at PT Mandiri Sekuritas, said that the year-end stock index target is corrected to 5,200 bps from an initial projection of 5,350.
"The decline is caused by global anxiety about the possibility that The Fed will begin to raise the Fed Funds Rate earlier than expected," he said in his analysis, last weekend.
According to John, the market's fear was proven by the recent meeting of the Federal Open Market Committee (FOMC), where the Fed outlined that it will not make specific decisions about when interest rates will be raised, saying that they might do it mid-2015.
Mandiri Sekuritas, John said, has also slightly corrected its forecast for the stock index movement in 2015. The securities firm now believed the JCI might rally earlier than expected, i.e. in February 2015, taking into account that the DPR would approve all revisions in the 2015 State Budget by then.
Investa Saran Mandiri analyst Kiswoyo Adi Joe also lowered his year-end projection for the stock index from around 5,300-5,500 bps to 5,000-5,200 bps. "The main factor is the increase in the BI Rate," he told Tempo yesterday.
According to Kiswoyo, external factors such as the planned increase in the Fed Rate will not affect the JCI much. The US central bank governor's Janet Yellen statement that the Fed would delay the hike has shrouded the market in uncertainties. As a result, the market will tend to be cautious, while the stock index will move slower.
FAIZ NASHRILLAH
