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ourse operator Indonesia Stock Exchange (IDX) is telling investors to remain calm as local stocks plunge for a second day amid a Trump-led emerging market rout, saying the recent sell-off does not reflect the fundamental growth potential of Indonesian corporations.

The benchmark stock index, Jakarta Composite Index (JCI), fell 2.22 percent on Monday to 5,115 after a 4 percent plunge on the previous trading day Friday as foreign investors sold off a total of Rp 4.43 trillion worth of stocks within the last two days.

The Indonesian stock market led losses that occurred across emerging markets as investors buy US assets and dump those from emerging market with US president-elect Donald Trump’s programs seen as stoking inflation and therefore opening a case for an interest rate hike in the world’s largest economy.

IDX president director Tito Sulistio admitted there was a “Trump effect” in the local market that had caused uncertainty among investors. However, they should not join the rout because the financial fundamentals of publicly listed companies remain positive for future growth.

“All of the shares are fundamentally good […] and our companies still see good income,” Tito told a press briefing in Jakarta on Monday in response to the continued massive sell-off.

The latest slew of local companies’ financial reports showed positive growth on revenues and net profit, with the 10 companies with the highest market capitalization seeing an average net profit growth of 11.8 percent and revenue growth of 6.4 percent. The firms include consumer goods giant Unilever Indonesia and private lender Bank Central Asia (BCA).

But such blue chip stocks have been the ones hit hard by the “flight to quality” phenomenon seen in emerging markets, where assets fly back to safe havens such as the US dollar, gold and yen, and exit riskier markets.

Shares of blue chip lenders Bank Rakyat Indonesia (BRI), Bank Mandiri and Bank BCA sent the stocks index downward having dropped 7.1 percent, 4.8 percent and 2 percent, respectively. Diversified conglomerate Astra International fell for a second day.

Prior to the massive sell-off, Indonesia’s JCI was one of the top performing major stock indexes around the world, having gained around 17 percent through the year, followed by Thailand. Now, Indonesia gained 11.4 percent year-to-date, trailing behind Thailand’s 14 percent gain.

“So that explains why we see big volatility in the stock market: Because we gained so much more beforehand,” Tito said.

Reza Priyambada, a stock market analyst with the Indonesian Association of Securities Analysts (AAEI), agreed with the bourse’s president director, saying that the Trump effect would likely persist only until the end of the week.

“I believe market players are aware that the Trump effect is not a thing to be feared,” Reza said, adding that he was optimistic the JCI index level could rebound up to 5,400 by the end of the year.

Indonesia’s reliance on domestic consumption, which accounts for more than half of the country’s economy, makes it resilient to global shocks, he added.

Universal Broker Indonesia head of research Satrio Utomo also said that there was nothing fundamentally wrong with domestic companies’ financial performance, although he was uncertain as to how long the Trump effect will last.

“Let’s just wait and see,” he said. (wnd)