T

he terrorist attacks in Jakarta on Thursday will not affect trading activities on the Indonesia Stock Exchange (IDX) next week as the market possesses a high level of resilience because of its experiences with previous assaults, analysts have said.

The analysts said the local stock market would instead get a boost from Bank Indonesia'€™s decision on Thursday to lower its benchmark rate for the first time in almost a year as the monetary policy could help accelerate the country'€™s economic growth.

Universal Broker Indonesia research head Satrio Utomo said on Friday that the sharp fall of the Jakarta Composite Index (JCI) early Thursday was mainly caused by the plunge in the Down Jones Industrial Average, the main price indicator on the New York Stock Exchange, rather than because of the terrorist attacks.

'€œIf it was due to the bombings, the JCI should have fallen by more than 2 percent,'€ he said over the phone, referring to the Dow Jones'€™ correction on Thursday.

A group of men assaulted a Starbucks outlet in the Sarinah area, Central Jakarta, on Thursday. Seven people were killed, including the five perpetrators, and 24 others were injured. The National Police blamed attacks on a radical group closely affiliated with the Islamic State (IS) movement.

Satrio added that since the first and worst terrorist attack, which happened at the Jakarta Stock Exchange building in 2000 and took the bourse around three months to recover from, the stock market had gradually built resilience to that kind of situation. It took less time to recover each time an attack happens, he said, giving as examples the approximate one-week period needed by the JCI to rebound after the 2003 JW Marriott blast in Central Jakarta and less than a day needed after the bombing at the Australian Embassy in Central Jakarta in 2004.

The JCI, the benchmark of the IDX, retreated 1.72 percent from Wednesday'€™s closing shortly after the attacks. However, the index rebounded in the afternoon trading session and ended slightly lower at 4,513 from 4,537 on Wednesday.

Satrio said one thing that could adversely affect the index'€™s moves in the following week was the plummeting oil price that had weakened big-capped oil and gas companies listed on various global bourses.

Recapital Securities research head Andrew Argado also stated that the attacks would not shake the economy, or the government'€™s economic policies. '€œIt [the incident] is just a small ripple,'€ he said. He pointed to the positive economic data released by the government recently, which showed stable economic fundamentals, such as the controlled move of the value of the rupiah.

The rupiah has traded at between 13,830 and 13,943 against the US dollar so far this month, according to Bloomberg data. The Indonesian currency fell slightly to 13,909 per dollar on Friday from 13,907 on Thursday.

Analysts predict that an improvement in the economic growth and the central bank'€™s decision on Thursday will make a positive impact on the stock trading, as investors believed that the lower interest rate would help accelerate economic growth.

'€œThe recent benchmark rate cut by Bank Indonesia [BI] will attract businesses to get loans to fund expansions,'€ Andrew said. He added that the index could touch the level of 4,580 next week, compared with its Friday closing at 4,523, which was 0.24 percent stronger than that of Thursday.