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View all search resultsJ.P. Morgan sees IDX at 7,000 this year, flags hurdles to 6% GDP growth
Corporate earnings growth next year is projected to reach 9 percent, driven by government spending and investment.
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Gioshia Ralie, CEO of J.P. Morgan Indonesia (left) and Benny Kurniawan, head of equity research at J.P. Morgan Indonesia (right), speak on Thursday in a media briefing in Jakarta. (JP Morgan Indonesia/-)
J
.P. Morgan projects the Indonesia Stock Exchange (IDX) Composite index to reach 7,000 by the end of this year, while saying that achieving 6 percent economic growth next year would require stronger stability and greater certainty.
Benny Kurniawan, head of Indonesia Equity Research at J.P. Morgan Indonesia, said in a media briefing on Thursday that despite multiple global and domestic headwinds faced by the local stock market, publicly listed companies still recorded 6 percent year-on-year (yoy) earnings growth in the first half of this year.
“Considering the state budget posture, we believe the economy will be quite stable. Although we expect [GDP] growth to come in slightly below the 6 percent figure by the end of the year, the J.P. Morgan team still expects the [IDX Composite index] to reach 7,000 by December,” Benny said.
He expressed optimism over Indonesia’s capital market, pointing out that corporate earnings growth remained strong despite challenges in some segments because of rising input costs.
Read also: J.P. Morgan expects earnings to improve amid a rising stock market
Corporate earnings growth next year are also projected to reach 9 percent, driven by government spending and investment. Government spending has boosted economic activity and created a trickle-down effect in some sectors, especially the consumer sector, which posted double-digit growth levels in the first half of this year.
The strong earnings performance came even as the IDX Composite Index declined 23 percent to around 6,600 points so far this year, which Benny attributed largely to negative sentiment.
