JAKARTA. Some domestic issues will be overshadowing Indonesia’s stock market until two weeks ahead. The hottest domestic issue is the gubernatorial election in Jakarta that will be held on 15 February 2017.
Aside of Jakarta, the local elections will be held concurrently in at least 100 regions across Indonesia. Therefore, the market will be carefully monitoring the domestic political dynamics.
Some analysts estimate that the concurrent local elections will be the most significant issue for the market participants. Economist at Bank Central Asia David Sumual said, the local elections, including Jakarta gubernatorial election will affect the market in this year. Let alone, if the Jakarta’s gubernatorial election lasts up to the second round.
However, analysts predict that the investors will not bother about who will be the winners. In this case, the investors will accept the results of the local elections, including Jakarta gubernatorial election. “The most important thing is Indonesia remains safe,” said Hans Kwee, Director of Investa Saran Mandiri, Sunday (5/2).
Historical data show that the Jakarta Composite Index (JCI) was stronger during the political events. The JCI grew stronger during 2012 Jakarta gubernatorial election, which lasted to two rounds. The similar condition repeated during presidential election in July 2014. The JCI even hiked by 14.63% during the presidential election in July 2009.
Aside of monitoring political issues, investors are waiting for the issuance of some data related to domestic economy in this week. The data will include the inflation rate, gross domestic product (GDP), trade balance, as well as the issuers’ financial performance along 2016.
Analyst at Binaartha Parama Sekuritas Reza Priyambada predicts that some issuers will book positive performance at 5%. He also estimates that consumer, banking, and mining commodity issuers will record a significant growth.
According to Hans, the financial report will show some mixed results. But overall, the results will reflect some improvements. “Therefore the market will be more consolidated and tend to be stronger,” Hans added.
David mentioned, in general, the global economic conditions remain uncertain and will affect to the market movement. The economic recovery in emerging market countries also will be slower. He also predicts that the economic recovery may have just realized in 2018, thanks to the acceleration of infrastructure projects, tax revenues, and repatriation funds.
Hans predicts that the JCI will be corrected to the support level at 5,294-5,228 and the resistance level of 5,380-5,400. Meanwhile, Reza predicts that the JCI will be ranging at 5,420-5,460. (Muhammad Farid/Translator)
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