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JAKARTA. Jakarta Composite Index (JCI) recorded the highest year to date (ytd) return than any Asian market.
JCI’s ytd return stood at 14,6%, while Hang Seng Index, Strait Times Index, and Nikkei ytd returns only stood at 6.49%, -2.68%, and -13.81%, respectively.
Some of local companies also recorded positive return from their blue chips shares. PT Indofood Sukses Makmur Tbk recorded 63.8% of return, while the South Korean biggest producer of processed food Nongshim only recorded 30.94% of returns.
In the same period, PT Telekomunikasi Indonesia Tbk (TLKM) recorded 33.3% of returns in Indonesia Stock Exchange (IDX), while the Philippines telecommunication company PLDT recorded minus 17.91% of return in Manila bourse.
According to Analyst at Minna Padi Investama Frederik Rasali, the positive movement was driven by Indonesia’s macroeconomic condition that is attractive for foreign investors.
Aside of the conducive macroeconomic, Indonesia has higher interest rate compared to Asian countries, such as Singapore. The high interest rate makes IDX has the higher minimum return estimation compared to other stock exchanges in Asia.
Frederik added that IDX’s market capitalization (market cap) is still lower compared to other Asian markets. However, the vibrant initial public offering (IPO) in IDX may attract foreign investors.
Analyst at Semesta Indovest Aditya Perdana Putra said that the scale of IDX’s market cap has affected to the recent high return. In other words, the lower market cap, the higher return. Adit also underlined that macroeconomic fundamental of Indonesia is attractive for foreign investors.
Tax amnesty also brings positive sentiment to IDX. In the period of June 2016, JCI recorded the third highest return among global markets.
This month, the position even hiked to the first place. “This is because local stock exchange needs liquidity”, Adit said. It is expected that the tax amnesty will inject the liquidity to IDX.
Recently, the realization of tax amnesty tends to move in positive area. At the beginning, Indonesia only obtained 7% of IDR165 trillion of assets repatriation target for the end of 2016. However, recently the repatriated assets have amounted to IDR21 trillion or 12% of the target.
The record has bring optimism that tax amnesty program will obtain maximum result. The result also gives positive sign that Indonesia has a better long term macroeconomic condition.
The positive prospective macroeconomic condition will also bring positive prospect to issuers in IDX in a long term.
Adit mentioned that most of investors who recently bought blue chips shares in IDX were attracted by the positive prospect of national macroeconomic condition in a long term. (Translator: Muhammad Farid)
