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Banks, commodities poised to drive IDX this year, after poor first quarter
Despite reaching an all-time closing high on Mar. 14, the Indonesia Stock Exchange (IDX) Composite index ended the first quarter of this year with only a slight increase of 0.22 percent, underperforming when compared with foreign indexes.
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Traders look at their screens while monitoring stock trading in Jakarta on March 16, 2023. (AFP/Bay Ismoyo)
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espite reaching an all-time closing high on Mar. 14, the Indonesia Stock Exchange (IDX) Composite index has ended the first quarter of this year with only a slight increase of 0.22 percent to 7,288.81 points.
The growth appears sluggish when compared with major global indexes, such as Japan’s Nikkei 225, the US’s S&P 500 and the European Stoxx 600, which surged by 20.63 percent, 10.16 percent and 7.02 percent, respectively, during the same period.
In Asia, almost all stock indices, including Korea’s Kospi, China’s SSE Composite, Thailand’s SET and India’s BSE Sensex outperformed Indonesia.
However, analysts expect the IDX Composite to follow the growth trajectory of its global counterparts for the rest of the year, fueled by profit growth in the banking sector and rising commodity prices.
Andre Benas, head of research at BCA Sekuritas, said the main factor behind the slow growth of the IDX Composite was a significant outflow of foreign capital. Political issues meanwhile, such as legal action sought by the losing candidates over the presidential election held in February, had been mostly ignored by the market, he added.
“One of the concerns is the weakening rupiah, as investors worry that president-elect Prabowo Subianto could disrupt the fiscal balance stability. Aside from that, the 'higher for longer' situation may delay the interest rate cut by Indonesia’s central bank,” Andre told The Jakarta Post on Friday, referring to the United States Federal Reserve’s (Fed) benchmark interest rates.
