The sector is deemed important as it consists of several blue-chip stocks with the largest weighting on the index while at the same time its performance is often seen as a bellwether for the country’s consumer spending and people’s purchasing power. Stocks of consumer giant PT Indofood Sukses Makmur and PT Unilever Indonesia as well as cigarette maker PT HM Sampoerna and pharmacy company PT Kalbe Farma are listed within the sector.

As of Thursday, the sector had lost 8.22 percent of its value and become the fourth-worst performer of 10 sectors. At the same time, the JCI expanded by 1.29 percent.

Analysts believe the sluggish growth of consumer goods stocks is related to jitters among investors amid a looming slowdown in global and domestic economic growth.

“Many investors, especially foreigners, are opting out of risky assets like Indonesian stocks as global economic growth seems to be continuing to decline this year,” said Yosua Zisokhi, Samuel Sekuritas equity analyst.

As a result foreign investors have started to sell their blue chip stocks that mostly consist of consumer goods companies, such as HM Sampoerna and Indofood.

The threat of a slowing global economy has led investors to sell equities and turn to safer assets, such as bonds and gold.

Popular

Lessons from Aceh peace process may still be relevant in today’s conflicts

To rescue or abandon Java?

Govt imports over 1,500 dairy cows to boost milk production