Foreign capitals outflown as Trump won

JAKARTA. The Jakarta Composite Index (JCI) dropped by 2.2% to 5,115.74 on Monday (14/11). During the recent two days, the JCI has declined by 6.14.

Foreign investors were likely moving out from the Indonesia Stock Exchange (IDX). During the consecutive four days, foreigners booked a worth of IDR4,76 trillion net sell.

Analyst at Semesta Indovest Aditya Perdana Putra predicted that the JCI may continue to decrease to 5,043. This could be both the current levels of support and fundamentals of JCI. Basically, the current level of JCI is not related to the condition and prospect of Indonesia's economy. "It is more related to the fundamentals abroad," he told KONTAN.

The plan for increasing The Fed's funds rate rise at the end of the year will become a sentiment for the IDX. Let alone, the Trump effect is still significant.

During the campaign period, Trump was often mentioned the discourse on economic policy, which tends to move out the US from the global trade environment. The sentiment has led the foreign investors to move out their funds from IDX, whereas IDX had actually recorded the highest returns compared to other stock exchanges. "The funds returned to the US," Aditya added. Therefore, the Dow Jones index is increasing, while the JCI's is declining.

On the other hand, the price earning ratio (PER) of the JCI has stood at the level of 14.2 times, or has stepped to the area of overbought. This level indicates that JCI will immediately decrease.

Vice President for Research Valbury Asia Securities Nico Omer assessed that the JCI lacks domestic positive sentiment. Let alone, rupiah is weaker. This remains affecting to the JCI's movement, although BI has ensured that the Central Bank will continue to keep monitoring rupiah.

Analyst at Panin Sekuritas Frederik Rasali added that recently the JCI indicators have shown that the IDX has entered the overbought area.

Ahead of the end of year, fund managers or investors usually tend to take profits."There should be fundamental reasons for profit taking. The 4th of November demonstration that ended up at riot and the Trump's victory might be the triggers.