JCI Drops, Economist Suggests Investors Switch To Strong Domestic Resilience Stocks

JAKARTA - Economic researcher at the Center of Reform on Economics (CORE) Indonesia Yusuf R Manilet advised investors to shift investment to shares of companies, which have strong domestic resilience amid the volatility of the capital market in the country.

"In conditions like this, investors are advised to distract companies that have strong domestic resilience or that do not rely too much on international trade," Yusuf said, quoted by Antara, in Jakarta, Tuesday, April 8.

This is because the US import tariff policy has the potential to disrupt global exports and trade dynamics which have a direct impact on the performance of export-oriented Indonesian companies.

The Indonesia Stock Exchange (IDX) Composite Stock Price Index (JCI) on Tuesday morning moved down following the weakening of global stock markets due to the United States (US) import rate policy.

JCI opened lower by 596.33 points or 9.16 percent to 5,914.28. Meanwhile, the group of 45 leading shares or the LQ45 Index fell 92.61 points or 11.25 percent to 651.90.

Responding to this condition, PT Bursa Efek Indonesia (IDX) temporarily suspended trading system trading at 09.00 to 09.30 Jakarta Automated Trading System (JATS) time.

Trading freezes in line with the decline in the JCI, which reached more than 8 percent.

In dealing with the JCI volatility, Yusuf said that investors' strategies and markets need to be focused on a number of important steps in order to deal with this condition of uncertainty more effectively.

In addition to turning to a company with strong domestic resilience, Yusuf said the first step that investors need to take is to maintain calm and avoid hasty decisions, as panic actually risks exacerbating the situation and causing unnecessary harm.

In addition, he continued, it is important for investors to actively monitor the direction of the Indonesian Government's policies, including possible interventions such as granting subsidies and efforts to establish new trade agreements with partner countries, which can help reduce the negative impact of the tariff policy.

Given that the global economy has been colored by various challenges, investors also need to prepare for a period of volatility and uncertainty with a more careful approach, one of which is through a portfolio diversification strategy to mitigate risks.