T

he Jakarta Composite Index — the main benchmark of the Indonesia Stock Exchange (IDX) — broke its psychological level of 5,000 for the first time thi s year on Thursday as Brexit worries subsided and following the Tax Amnesty Law’s endorsement.

The JCI ended at 5,016.65, 0.7 percent higher than the previous day. All indices ended in the green and the bourse recorded a total of Rp 8.5 trillion (US$644.76 million) in transactions throughout the day.

According to data from the IDX, there was Rp 1.74 trillion worth of net buys on Thursday, bringing the year-to-date net buy figure to Rp 13.02 trillion.

It was the first time the JCI exceeded the 5,000 mark in 2016 and even led a surge in Southeast Asia’s shares.

The Philippines’ equity gauge surged 1.7 percent, to its highest since May 22, 2015. Thailand’s SET Index increased 0.6 percent, trading near its highest level in almost a year, while Singapore’s benchmark measure was up 1.3 percent, giving it a two-day gain of 2.3 percent.

The last time the JCI posted such a positive performance was in June 2015, but the index spiraled downward from that point to hit rock bottom at 4,207.8 in October.

Analysts said worries over Brexit were clearly over as investors chose to return to areas with bright prospects, such as Indonesia. It didn’t hurt that Indonesia passed the Tax Amnesty Law on Tuesday either.

“Investors are running away from Europe and into areas where there is growth,” Mixo Das, a strategist in Singapore at Nomura Holdings Inc. said as quoted by Bloomberg.

“Indonesia and the Philippines certainly fall into that category. Indonesia’s tax amnesty is definitely positive for the economy. In the Philippines, any increase in infrastructure investment by the new government is most welcome.”

The law is expected to bring home trillions of rupiah currently parked at several tax havens overseas. Implementation will be conducted in several phases and last until March 2017.

Nomura now has a more favorable stance on Asean stocks versus Korean and Taiwanese equities, as they are less dependent on demand from Europe and other developed nations, the Japanese brokerage said in a note on Monday.

Asjaya Indosurya Securities analyst William Surya Wijaya said euphoria from the tax amnesty might become a growth driver for the JCI for a certain period of time.

“But progress will depend on other stakeholders too,” he said in a telephone interview, adding that it remained to be seen how businesspeople would make use of the new law.

William also attributed the positive sentiment to the government’s efforts in restructuring the bureaucracy, which had created an improved image for Indonesia.

At the same time, inflation remains benign and that has paved the way for Bank Indonesia (BI) to ease its monetary stance and revise its macroprudential measures.

The revised loan-to-value policy, for instance, is believed to have triggered higher demands for loans and pushed economic growth.

Meanwhile, Investa Saran Mandiri analyst Hans Kwee said positive sentiment from the tax amnesty might tone down after the Idul Fitri holidays.

“Implementation of the tax amnesty will drive the index’s growth afterwards. In the meantime, investors will also look at the real performance of each company approaching year-end, when they traditionally do some window dressing,” he said.

Both Investa Saran Mandiri and Asjaya Indosurya recommend stocks in banking, consumer goods, property, construction, infrastructure and agriculture sectors as they are the ones predicted to gain a windfall from the tax amnesty.