Caused by the Demonstration, Many of Foreign Investors Run Away
TEMPO.CO, Jakarta – A lot of foreign investors have left the Indonesian capital market in the last two days. They posted net selling in the regular market as big as Rp565.19 billion and Rp993.94 billion on Tuesday and Wednesday. The unstable domestic political situation is said to be the trigger for releasing their investation.
"Political conditions that are widely reported, of course, enough to bring influence to the market, it might be the main cause of the decline in trade performance in recent days," said Director of Trade and Regulation of Members of the Indonesia Stock Exchange (IDX) Laksono Widodo, Wednesday, September 25, 2019
Laksono believes that this condition will not drag on, because the investors strongly trust on Inonesian domestic financial market.
The Performance of the Composite Stock Price Index (CSPI) had slumped into the red zone since last Thursday. Luckily, the CSPI finally succeeded in ending its weakness and perched in the green zone, edging up 0.14 percent to 6,146.4 from the previous day. "We hope that in the next few days the CSPI will be more normal, meaning that if the political sentiment is not sustainable then the index can return to its fundamental position," said Laksono.
PT OSO Securities analyst Sukarno Alatas said that the demonstration against the revision of the Corruption Eradication Commission (KPK) Law and the plan to approve some laws invite the attention of foreign investors. However, according to him there was an external sentiment which effects the speed of the CSPI to the next. "Many investors increasingly believe the United States will be increasingly recessionous due to the trade war," he said.
So that investor funds will return to the developing markets, including Indonesia. Besides, from the yield side up to the economy prospect, Indonesia still has enough resilience. " CSPI is predicted be stronger in the future with movements in the range of 6,115-6,213," said Sukarno
Indonesian Center of Reform on Economics (CORE) economist, Piter Abdullah, said the condition was quite disturbing investors in money market. "Actions that are held simultaneously make the market worry, and investors will continue to be aware of the turmoil that occurs, at least until the inauguration of a new government," he said. However, based on historical records the past five years, the impact of the demonstration will not long disrupt financial market stability. "Usually even though it’s getting weak, it will be only temporary, or the weakening is small," he said.
Anxiety, on the one hand, also came from business actors in the real sector. Deputy Chairman of the Indonesian Employers' Association (Apindo) Shinta W. Kamdani said the stability of social economy was the main focus of investors. "Because business can only move and grow in a stable socio-political situation," she said. Shinta said that businessmen were worry of the possibility whether the turmoil will be continue or not. "Although the demonstration is a democratic action that has been appreciate, the demonstrations in Indonesia have a bad track record, where the masses often become anarchist, damaged, or create unsafe conditions for conducting business activities," he said.
NEWS24XX.COM/CTR
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