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RI capital market banks on local investors to survive 2023: IDX
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A general view shows Indonesia’s stock exchange in South Jakarta on March 24, 2020. (AFP/Adek Berry)
I
ndonesia Stock Exchange (IDX) said the country’s capital market would make it through the uncertainties that loom in 2023, as the market would bank on the country’s ever-growing domestic investors, who have been relatively unaffected by current global turmoil.
IDX CEO Iman Rachman said on Thursday that the country’s capital market had been dominated by domestic investors, who had kept their assets in place in the event of heightened global volatility such as soaring Federal Reserve rates.
According to Iman, foreign investors now had far less shares in average daily transactions, amounting to just around 30 percent compared to several years before with about 70 percent shares. This would keep the market relatively stable, he said.
“When the Fed raises their interest rates, foreign investors often move their assets; we call it flight to quality. Now we can better withstand this because we have larger shares of domestic investors,” Iman told reporters during a year-end event held by the bourse.
Read also: RI mutual funds reeling as rate hikes, regulatory changes bite
Iman said he was aware that many investors chose to remain cautious about next year due to the looming perfect storm, in which some countries would be squeezed by recession, while battling high inflation.
He said Indonesia’s economic growth was projected to hover between 4.8 and 5 percent next year, giving the country a better footing from the domestic side.
