JAKARTA: The Indonesian Stock Exchange (IDX) index and market capitalisation hit new all-time highs in late August, a milestone that the Financial Services Authority (OJK) attributed to the country’s stronger economic fundamentals and improved outlook for the global financial market.
“On Aug 28, the IDX Composite reached its highest level at 8,022.76 and recorded an all-time high market capitalisation of 14.4 quadrillion rupiah,” OJK head of capital market supervision Inarno Djajadi said in a virtual press conference.
The stock market “generally posted positive performances” throughout the month, he added, with the IDX Composite standing at around 7,830 points, up 4.63% month-to-date (m-t-d) and 10.60% year-to-date (y-t-d) as of Aug 29.
The agency also reported that the average daily transaction value in August stood at 14.32 trillion rupiah, up from 13.42 trillion rupiah in July.
The figure represented an 11.42% y-t-d increase and is also higher than last year’s average daily transaction value of 12.85 trillion rupiah.
The OJK further noted that stock the transaction frequency climbed to an all-time high on Aug 29, reaching 2.49 million transactions, surpassing the previous record of 2.36 million on Aug 25.
Inarno said that foreign investor sentiment had improved after two consecutive months of net selling, with a net inflow of 10.96 trillion rupiah in August.
However, net sales since the beginning of the year still amounted to 50.95 trillion rupiah.
This indicates growing global confidence in Indonesia’s economic prospects, he said.
Inarno also addressed the impact of the recent week-long political unrest on market volatility from late August through early September, and said that the effects remained limited.
“With solid economic fundamentals and the OJK’s commitment to maintaining market stability, we view the volatility that occurred in late August and early September as limited, and we expect conditions to continue improving going forward,” he said.
He added that the agency had put in place a policy mix to manage sharp market fluctuations and respond to global policy dynamics, including allowing companies to conduct buybacks without requiring shareholder meetings, suspending short selling, adjusting trading halts and implementing asymmetrical auto-rejection.
Widespread protests erupted in response to a sharp increase in lawmakers’ housing allowance.
The demonstrations last week escalated into unrest over police brutality following the death of Affan Kurniawan, a 21-year-old motorcycle taxi driver who was run over and killed by a tactical police vehicle during a protest in Jakarta.
Following that, the IDX Composite fell as much as 3.6% to 7,551 points at the market’s opening on Monday but recovered by the midday break before closing down 1.21% at 7,736 points, as the government sought to calm investors.
The index regained part of its losses and closed at 7,867 points last Thursday, marking a 1.7% gain over the subsequent three days.
Since the beginning of the year, the IDX Composite rose 11.12% as of last Thursday’s close.
The growth remained below that of other major stock exchanges in South-East Asia, such as Vietnam’s VN-Index and Singapore’s Straits Times Index, which are up 32.8% and 13.4% y-t-d, respectively.
Indonesia’s stock market is still performing better than Thailand’s SET Index and Malaysia’s FBM KLCI, which have fallen 10.5% and 3.9%, respectively, over the same period. — The Jakarta Post/ANN
