Foreign Investors Push Indonesia’s Jakarta Composite Index Up
Although at the end of Wednesday’s trading day (11/06) Indonesia’s benchmark stock index (known as the Jakarta Composite Index or IHSG) was up, the index had been moving in the red zone during most of the day. Moreover, the index did not get support from the Indonesia rupiah exchange rate nor did it get support from Asian stock indices which tended to decline after yesterday’s weakening indices on Wall Street. Fortunately, foreign investors recorded net buying, thus contributing to the 0.52 percent growth of the IHSG to 4,971.95 points.
Several Indonesian large cap stocks were popular on today’s trading day and managed to support the index. These included Unilever Indonesia, Indocement Tunggal Prakarsa, United Tractors, Astra International and Semen Indonesia.
Asian stock indices were mixed with a declining trend as investors responded to the World Bank’s latest global economic growth outlook. The Washington-based institution cut its global economic growth forecast because of the weaker outlooks for the economies of the USA, Russia and China, as well as the geopolitical tensions between Russia and Ukraine which triggered worldwide concerns. Chinese stock indices were hit most by this release.
The Indonesian rupiah exchange rate rebounded back into positive territory ahead of the central bank’s Board of Governor’s Meeting (scheduled for Thursday 12 June 2014). As the central bank has already indicated that its benchmark interest rate (BI rate) will be maintained at 7.50 percent, market participants reacted slightly positive.
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