JAKARTA. Markets are adopting wait and see stance over the inauguration and the policy of Donald Trump as the President of the United States of America (the US).
This has led foreign investors to book net sell during the first ten days of stock exchange trading. During the period, foreign investors booked a total net sell of Rp 34 trillion.
Actually, the foreign net sell during the first ten days of stock exchange trading in 2017 is lower compared with the same period in the last year. The average foreign net sell in a day has dropped by 47% from Rp 255 billion in 2016 to Rp 134 bilion in this year.
However, the foreign net sell has impacted to the Jakarta Composite Index (JCI). Since the last week until Monday (16/1), JCI has been showing poor performance. Even, the JCI has been standing at the level of minus 0.5% since the early of 2017. This is the worst performance among the benchmark stock exchanges in Asia and South East Asia.
Head of Research at MNC Securites Edwin Sebayang said that several factors have affected the massive foreign net sell in the early of 2017. For the investors, the US becomes more attractive with the economic growth is predicted to be ranging around 3%-4% in this year.
“The issuers in the US have strong performance, high net profits, and attractive dividend yield. These can increase the valuation,” Edwin said, Monday (16/1).
Recently, markets are waiting for Trump’s speech, cabinent announcement, and 100-day work program. Indeed, the markets are sensitive of the realization of Trump’s program. Trump will be inaugurated on 20 January.
Some domestic factors have also led the foreign net sell. Edwin assesses that the government lacks policies, which may attract foreign investors to return to Indonesia’s stock market. The government has also issued some uncertain policies, such as the policy on the relaxation of mineral export. He predicts that JCI will stand at the support level of 5,214 and at the resistance level of 5,331.
Likewise, Analyst of Binaartha Parama Sekuritas Muhammad Nafan Aji Gusta assessed, the sentiments abroad had depressed the JCI. He added, the issues related to Trump’s inauguration have brought significant impacts to global stock markets. Some global stock markets are going down, due to the sentiment.
However, according to Nafan, this remains normal, while the stock market remains attractive for the foreigners.
Aside of Trump’s factor, foreigners are also waiting for government policies, such as the Economic Package XV on dwelling time in port. In order to bring back the foreigners to the position of ‘net buy’, the government has to be able to stifle the political turbulence during the concurrent local elections.
According to Nafan, the JCI will remain stand at the safe position if it is moving in the area of 5,255-5,300.
Nafan predicts that the JCI will stand at the support level of 5,202 and at the resistance level of 5,360. (Muhammad Farid/Translator)
