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Stocks rebound on first day of PSBB as investors regain composure
The Jakarta Composite Index (JCI), the main gauge of the Indonesia Stock Exchange (IDX), climbed by 2.89 percent to 5,161.82 against the previous trading day, continuing last Friday’s rally of 2.56 percent.
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The Indonesian Stock Exchange is viewed in front of a screen showing stock prices. (JP/Seto Wardhana)
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he Indonesian stock market rebounded on Monday, the first day of the reimposition of large-scale social restrictions (PSBB) to contain COVID-19 in Jakarta, after the market crash last week, as investor optimism was restored as a result of the limited impact of the measures on businesses.
The Jakarta Composite Index (JCI), the main gauge of the Indonesia Stock Exchange (IDX), climbed by 2.89 percent to 5,161.82 against the previous trading day, continuing last Friday’s rally of 2.56 percent.
The market uptrend offset the dramatic plunge of 5.01 percent last Thursday, the lowest since March, to 4,891.46, which led to a half-hour trading halt as investors engaged in a panic sell-off. The market crash was sparked by the initial announcement of the reintroduction of PSBB amid the continuous rise in COVID-19 cases.
“Surprisingly, the measures in this reimposition of the PSBB are much milder than what the market initially expected,” Mirae Asset Sekuritas Indonesia head of research Hariyanto Wijaya told The Jakarta Post on Monday.
In a Mirae Asset Sekuritas report published on Monday, cowritten by Hariyanto and analyst Emma A. Fauni, both researchers stated that the impact of the PSBB on earnings per share (EPS) should be less severe than expected, as non-essential businesses are still allowed to operate, despite limitations.
While the Jakarta administration decided to reintroduce the PSBB, as the country’s COVID-19 tally surpassed 221,500 cases on Monday, the curbs are viewed as more relaxed than the initial implementation in April.
During a press briefing on Sunday, Jakarta Governor Anies Baswedan announced that workplaces in 11 essential sectors – including health, food, energy, communications, finance, logistics and daily needs retail – would still be allowed to remain open at half capacity. Meanwhile, private companies outside these sectors as well as government offices must implement work-from-home policies and allow no more than 25 percent of their employees to work in the office at the same time.
