Wimboh Santoso, the Financial Services Authority (OJK) chairman, said foreign inflow had returned to the bourse in the past months, indicating that investors’ confidence had improved.

“Foreign investors will always look for the highest yield. With stable economic conditions, investors’ confidence will increase, and the rupiah will stabilize,” he said after the IDX’s opening ceremony on Wednesday.

Wimboh is pinning his hopes on softer external pressures this year compared to last year, reasoning that the United States Federal Reserve is looking at fewer hikes in its policy rates — possibly two — this year.

At the end of last year, the Jakarta Composite Index (JCI)closed with a correction of 2.54 percent to 6,194, which was still one of the lowest in the Asia-Pacific region and the best in ASEAN, he said, adding that he was optimistic that the JCI would reach 6,500 to 7,000 this year.

Coordinating Economic Minister Darmin Nasution said despite ongoing external pressures, especially the trade war between the US and China, Indonesia’s economic conditions had proven to be resilient to external shocks.

“Our domestic economy has shown its resilience to turmoil, which can be seen in our economic growth, inflation, poverty and employment levels, and so on.”

Darmin expects inflation this year to be lower than last year, adding that he was optimistic that the government would be able to gradually maintain inflation at a lower level year to year, despite admitting that last year’s inflation was influenced by an increase in the price of eggs and freight rates.

The government expects this year’s inflation target to be 3.5 percent plus minus 1 percent.

Statistics Indonesia on Wednesday announced that the 2018 inflation rate was recorded at 3.13 percent, lower than the 3.5 percent target set in the 2018 state budget. The 2018 rate was also lower than the 3.61 percent in 2017, but higher than the 3.02 percent in 2016.

Although the domestic economy remains strong, Darmin called on the OJK, IDX and all self-regulatory organizations to encourage the public to continue investing in the stock market to boost financial deepening.

Meanwhile, IDX president director Inarno Djajadi said the bourse was committed to ensure that Indonesia’s equity market would become an attractive alternative instrument for investors.

“External factors are given factors, so we can’t do anything about that. However, what we can do is to make ourselves [the IDX] stronger through financial deepening, and strengthening supply and demand,” he added.

From the supply side, the IDX is hoping that more companies will hold initial public offerings (IPOs) this year, surpassing the number of IPOs of 57 companies last year.

The potential remained high, Inarno said, and the bourse would attract more firms by collaborating with all stakeholders in the capital market.

The bourse will also add more product variations.

For instance, the IDX would create new derivative products, such as Indonesian Government Bond Futures, single stock and index futures, as well as structured warrants, he said.

These additional product variations are important because when stock prices fall, investors can still benefit from hedging.

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