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Stock market expected to fare better next year amid strong business confidence
The Jakarta Composite Index, the main gauge of the Indonesia Stock Exchange, is expected to reach 7,050 next year.
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A man passes the iconic round table on the trading floor of the Indonesia Stock Exchange (IDX). Analysts estimate that the Jakarta Composite Index (JCI) will hit the 7,000 mark in 2020. (thejakartapost.com/Wienda Parwitasari)
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arket players are upbeat that the stock market will fare better in 2020, particularly in the second half of next year, as an omnibus law and relatively stable economic growth are expected to bring positive sentiment to the market.
Mandiri Manajemen Investasi president director Alvin Pattisahusiwa said that once the omnibus bill was passed after being submitted to the House of Representatives in the first quarter of next year, it would bring fresh hope that business activities would be revived.
“The omnibus law will be implemented in 2021, but market players will price in its positive impact six months before,” he said at a business forum held to discuss the country’s 2020 economic outlook in Jakarta on Tuesday.
The bill will harmonize about 70 overlapping laws and regulations that are believed to hamper investment and business activities.
Citigroup Sekuritas Indonesia head of research Ferry Wong said the bill, coupled with a stronger government coalition and business-friendly Cabinet, had brought more confidence to business players. With improved business confidence, Indonesia could attract more foreign direct investment (FDI), he said.
Ferry said these aspects, along with rising crude palm oil (CPO) prices, an increase in private companies’ capital expenditure and lower interest rates, would help increase the earnings of listed companies next year.
“We project these factors could increase earnings per share by 10.1 percent next year,” he said.
