This renewed interest in Indonesian stocks could be related to window dressing ahead of the year-end (a strategy that is often used by mutual fund and other portfolio managers to improve the appearance of a fund's performance before presenting it to clients or shareholders).

Moreover, foreign investors have already sold a lot of Indonesian stocks so far this year - primarily due to global factors such as monetary tightening in the USA and geopolitical issues - and therefore it makes sense that foreigners now start to become interested again in emerging (equity) markets. So far this year, foreigners sold more Indonesian stocks than they bought. Year-to-date, foreigners' net sell has now reached IDR 26.61 trillion (approx. USD $2 billion).

Meanwhile, not all foreign funds that exited the stock market actually left Indonesia. So far this year there in fact occurred a marked increase in foreign funds into Indonesian state bonds. However, considering the central bank of Indonesia (Bank Indonesia) continued to cut, aggressively, its interest rates in August and September, bonds have somewhat lost their appeal.

But despite foreigners withdrawing their money from Indonesian stocks so far this year, the benchmark Jakarta Composite Index still managed to touch a new record high last week, implying domestic investors have been eager to invest in Indonesian stocks. As a result, Indonesian stocks are currently rather expensive and this could make foreign investors somewhat hesitant to invest heavily in Indonesian stocks and could make them prefer to wait & see first before taking any action.

On Friday (24/11) the Jakarta Composite Index rose 0.06 percent to 6,067.14 points.