Market Beware Of JCI-Rupiah Pressure If Protest Tensions Still Continue

JAKARTA - KB Economist Valbury Sekuritas Fikri C. Permana assessed that the financial market is still filled with vigilance, with the potential for pressure to continue at the Composite Stock Price Index (JCI) and the rupiah exchange rate if the tension of demonstrations in Jakarta continues.

"Today because there is pressure from demonstrations, the market is also careful. Moreover, there are concerns that the demonstration will still take place today, also before on Monday, August 25. Maybe this makes the JCI a little 'loyo' today," said Fikri as quoted by ANTARA, Friday, August 29.

Fikri estimates that the JCI will be in the range of 7,800-7,820 at the close of today.

Meanwhile, the rupiah is expected not to weaken deeper than the range of Rp. 16,520 per United States (US) dollar.

Although the fundamental exchange rate is actually not too depressed by the weakening of the US dollar index, domestic sentiment from demonstrations has made investors more careful to place their funds.

Since the announcement of the results of the BI Board of Governors' Meeting (RDG), the rupiah has weakened from Rp16,271 at the close of trading Wednesday (20/8) to Rp16,339 on Friday (29/8) morning.

Fikri noted that this weakening was mainly triggered by a decrease in the BI-Rate by 25 basis points (bps) which suppressed the yield of Government Securities (SBN), thus encouraging the release of foreign funds from the bond market.

Meanwhile, the JCI was close to the 8,000 level on August 20, driven by optimism for lower benchmark interest rates and economic growth.

However, the sentiment of the demonstration made the index rate corrected, while the rupiah actually weakened since that date due to the flow out of the bond market, so the pressure was more dominant.

Faktor fundamental turut menambah tekanan, seperti defisit transaksi berjalan yang melebar dan defisit neraca pembayaran yang menandakan aliran keluar dana dari Indonesia. Kombinasi kondisi ini membuat pasar bergerak lebih berhati-hati.

Adapun pada penutupan perdagangan sesi I, Jumat hari ini di Bursa Efek Indonesia (BEI), IHSG tercatat anjlok 180,80 poin atau 2,27 persen ke posisi 7.771,28.

Sementara itu, rupiah pada pembukaan perdagangan Jumat di Jakarta melemah sebesar 1 poin atau 0,01 persen menjadi Rp16.354 per dolar AS dari sebelumnya Rp16.353 per dolar AS.

The fundamental factor also adds to the pressure, such as a widening current account deficit and a balance payment deficit that indicates the flow of funds out of Indonesia. The combination of this condition makes the market move more carefully.

As for the closing of trading session I, Friday today on the Indonesia Stock Exchange (IDX), the JCI recorded a 180.80 point drop or 2.27 percent to 7.771.28.

Meanwhile, the rupiah at the opening of trading Friday in Jakarta weakened by 1 point or 0.01 percent to Rp16,354 per US dollar from the previous Rp16,353 per US dollar.