Economist: Government Needs To Listen To Public Input To Restore JCI Performance

JAKARTA - Director of the Center of Economics and Law Studies (Celios) Bhima Yudhistira believes that the government needs to listen to public input to restore the performance of the Indonesia Stock Exchange Composite Index (IHSG).

Bhima, quoted by Antara, Monday, March 24, said that the weakening of the JCI was caused by the accumulation of negative precedents that had occurred recently. One of them is related to the governance of the Danantara Investment Management Agency (BPI).

According to him, investors are quite careful with the Danantara concept that manages profits from SOEs, especially from the banking sector.

Moreover, this week there will be a general meeting of Himbara bank shareholders which further affects investor sentiment.

Then, Thaksin Shinawatra's appointment as the Danantara Advisory Council is also said to have an impact on investor confidence, given Thaksin's track record some time ago.

"It should have heard input and used Danantara to include the best talent," said Bhima.

On the other hand, the dynamics of domestic politics is also considered to have contributed to the weakening of the JCI.

The demonstration against the TNI Bill which was responded to by the ratification of the draft into law is considered to trigger political instability.

The expansion of military participation, including in economic sector posts, has the potential to further suppress investor confidence.

"There will be a change of distance. Investors will see Indonesia become a risky market," he added.

Bhima reminded the government to improve public trust in order to avoid continuing risks. Because, if the stock market continues to weaken, foreign direct investment (FDI) performance can also be affected.

Chief Economist & Head of Research Mirae Asset Sekuritas Rully Arya Wisnubroto assessed that the announcement of the structure of the Danantara management was not the cause of the JCI correction.

According to him, the Danantara management is filled with professionals who have adequate experience.

Chief Executive Officer (CEO) Rosan Perkasa Roeslani also believes that the Danantara management structure will provide a positive signal for the Indonesian economy and bring goodness to all Indonesian people.

Meanwhile, Coordinating Minister for Economic Affairs Airlangga Hartarto assessed that the JCI, which experienced significant corrections today, was more influenced by market dynamics.

JCI on Monday afternoon closed down 96.96 points or 1.55 percent to 6,161.22. While the group of 45 leading shares or the LQ45 index fell 11.00 points or 1.59 percent to 681.02.