Stock Market Update Indonesia: Rising 0.23% on Jokowi’s Inauguration
It was a good start of the week for the benchmark stock index of Indonesia (known as the Jakarta Composite Index, abbreviated IHSG). Various factors, both internal and external, managed to push the index higher on Monday (20/10). Externally, the IHSG was supported by positive Asian indices which responded to last week’s good US economic data (building permits, housing starts, and consumer sentiment). Moreover, the sharply appreciating Indonesian rupiah exchange rate made Indonesian assets more attractive.
The index was also supported by today’s inauguration of the new president (Joko Widodo) and vice president (Jusuf Kalla). Furthermore, foreign investors recorded net buying worth IDR 760.2 billion (USD $63.4 million). However, as usual, whenever the IHSG shows a sharp upward movement, it is soon followed by profit taking. After the index hit the level of 5,100 just before noon, market participants decided to engage in profit taking for the remainder of the day.
At the end of the day, the Jakarta Composite Index had gained 0.23 percent to 5,040.53 points.
The Indonesian rupiah exchange rate appreciated sharply as it took advantage of the weakening US dollar after a Federal Reserve official had stated that the US economy still requires the continuation of the bond-buying program.
Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 1.48 percent to IDR 12,041 per US dollar on Monday (20/10).
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