TEMPO.CO, Jakarta – The Jakarta Composite Index (JCI) closed 44.98 points (0.89 percent) up to 5,074.32 bps, responding speculations of additional stimulus by the European Central Bank (ECB) and the Bank of Japan (BOJ). Investors are optimistic of the global economic prospects, which ultimately lead them to buy.
Purwoko Sartono, chief researcher at Panin Securities, said that speculations on the additional stimulus became a positive catalyst for the index. As the market is days away from seeing the Federal Reserve end its third quantitative easing (QE3) program, investors believe that capital inflows to emerging markets will not be disturbed.
"Speculations on ECB and BOJ reduce investors' concerns about the negative impact the Fed's stimulus," Purwoko told Tempo yesterday.
However, Purwoko said JCI's gain was also the result on the developments in Joko Widodo's cabinet formation. The circulation of economic minister candidates, whom investors consider to be market-friendly and have clean track records, made investors believe that the domestic economy would grow significantly.
"Although some [investors] still prefer to wait and see, they tend to respond positively over the economic minister candidates," he said.
Purwoko suggested investors to collect banking stocks such as BBRI, BBCA, and BMRI, as banks are scheduled to release their financial statements soon.
With a tendency rally, Purwoko predicted the index to move in a limited in range of 5,030 to 5,100 bps. Blue chip stocks are already overpriced, which will make it difficult for the index to gain stronger. "In this situation, there is opportunity to pay attention to second-tier stocks," said Purwoko.
PDAT | MEGEL JEKSON