212 rally was peaceful, market reacted positively

JAKARTA. Unlike the rally on the last 4 November (411), market participants were calmer in responding the peaceful rally on 2 December (212). As the result, Jakarta Composite Index (JCI) was closed up by 0.97% to the level of 5,245.96 on Friday (2/12).

On the last 4 November, JCI only slightly increased by 0.62% to 5,362.66. Apparently, market participants were more anxious in responding to 411 rally.

The JCI even dropped during one week before the 411 rally. The JCI was once at the level of 5,416.84 (27/10), before dropped to 5,329.50 (3/11). The index once dropped by 1.61%.

However, one week before until the D-day of 212 rally, the JCI increased by 2.71%. The volume and value of the transaction during the period were higher compared with one week before 411 rally.

Market participants were calmer, since the government and police were actively approaching various groups to prevent the potential riot during the 212 rally. As the result, the sentiment of the rally did not significantly affect to the index.

Analyst at Recapital Securities Kiswoyo Adi Joe said that the sentiment of the rally did not affect to trade. He added that the market even only reacted temporarily to Sarinah bomb attack.

The JCI was much more affected by the global sentiment. “There was sentiment from OPEC’s decision, which was followed by Indonesia’s decision to temporarily withdraw (its membership from OPEC). It became the positive catalyst for the index,” said analyst at NH Korindo Deky Rahmat Sani, Friday (2/12).

Kiswoyo said that the stronger JCI was also supported by a stronger rupiah exchange rate against the US dollar. Rupiah exchange rate once stood at Rp 13,463 per US dollar, despite it dropped again.

However, analyst suggested the market participants to be cautious during the next week. The JCI and rupiah movements will be affected by the release of the US employment data. The US Employment Statistic Bureau announced that the employment absorption in non-farm payroll (NFP) sector in November was 178,000 people, higher than initial prediction at 177,000 people. The unemployment rate also dropped from 4.9% to 4.6%.

Deky predicts that the JCI may remain stronger until the end of the year. “This year (JCI) is likely to stand at the level of 5,500,” said Deky.

Chief Investment Officer Syailendra Cholis Baidowi said that the JCI’s movement will be stable and solid to the level of 5,300 by the end of this year. “JCI will stand at around 5.9006.100," he said.

Cholis added that the index will not be affected by non-economic fundamental factor, as long as the macroeconomic condition is solid. The correction due to global sentiment should be used to collect attractive shares at a low price.

(Muhammad Farid/Translator)