JCI Waits on Inflation

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  • TEMPO.CO, Jakarta - The publication of issuers' financial statements became the dominant catalyst affecting stock price movements throughout last week's trade. Investors' decided to sell as many big cap issuers posted negative performances.

    NH Korindo Securities chief researcher Reza Priyambada said listed companies' slowing performances raised investors' fear over the prospects of stock ownership. A lot of the investors then decided to let go of their portfolio temporarily, as a reaction spontaneous from the "expectation that other issuers' performances will also decline."

    Additionally, the Jakarta Composite Index (JCI) was also corrected by the rupiah correction. Speculations of a Fed Rate hike after the FOMC meeting led to a jump in greenback demand, pushing the rupiah further down to around Rp13.500 per US dollar.

    Reza reminded investors to remain cautious and take a wait-and-see stance. The index's climb to 4802 last week does not mean that its correction phase is over.

    "As they wait for the release of July's inflation, investors must remain alert for a possibility that the data is not as expected," he said.

    Bank Indonesia had predicted July's inflation at 0.8 percent. To investors, the low rate signals a declining purchase power, not Indonesia's ability to control inflation.

    Today, the JCI is expected to move in a limited range of 4750-4817 bps. Investors are advised to keep their eyes on stocks with potentials of technical rebounds such as INTP, MPPA, and UNVR.