Responding To Purbaya, IDX Boss Affirms Focus On Fundamentals, Not JCI Numbers

JAKARTA - PT Bursa Efek Indonesia (IDX) has opened its voice regarding the statement by the Minister of Finance, Purbaya Yudhi Sadive, which estimates that the Composite Stock Price Index (JCI) can reach 9,000 by the end of 2025 and 32,000 in the next 10 years.

IDX President Director Iman Rachman emphasized that the IDX's focus is not on certain figures, but on strengthening market fundamentals as the main basis for index movement.

"We continue to hope that our index will continue to rise, no matter how many numbers," he said at a virtual press conference of the Extraordinary General Meeting of Shareholders (EGMS), Wednesday, October 29.

He added that the JCI discussion should be directed at efforts to strengthen market foundations, not just number predictions.

"Yesterday we spoke frankly, 8,000 are still a necessity, and it turns out that it can be achieved even faster than the target. This means that we do not discuss the JCI, but what efforts are being made that have an impact on the JCI. JCI, in my opinion, is the result," he explained.

Iman also emphasized that the performance of the stock market is not only determined by the high trade activity, but also the fundamental quality of the listed company.

"Not only can we talk, oh the trading is crowded, but if the company's fundamentals are not good, it doesn't increase the market cap. So there are many things that affect the JCI," he said.

Previously, the Minister of Finance of the Republic of Indonesia, Purbaya Yudhi Sadive, was optimistic that the Composite Stock Price Index (JCI) would reach 9,000 levels by the end of 2025. In fact, it has the potential to reach 32,000 in the long term.

Purbaya explained that every statement and policy issued will be carefully considered by market participants, and in the end, it will be reflected in the position of the investment portfolio.

He also did not deny that there is still a phenomenon of fried shares that can cause distortion of index movements, especially due to artificial price increases.

However, he remains optimistic because there are still many stocks with strong fundamentals and large market capitalization that are the main pillars of the JCI.

"That's why the index can go up. If you ask me (JCI) how? To the moon I said, It creates optimism too. At the end of this year how much? 9,000," he said at the Sarasehan 100 Economist Indonesia event, Tuesday, October 28.

Furthermore, he estimates that the JCI could penetrate 32,000 in the next ten years.

"In the next 10 years, how many? 32,000 People say I lied carelessly But it's based on 30 years of experience, the last 20 years, the last 25 years," he said.

According to Purbaya, in one full business cycle, the stock index can generally grow four to five times and the pattern will continue to repeat itself, as market behavior (behavioral system) fundamentally does not change much over time.

"Starting from the beginning of the business cycle to the back, at the end of the business cycle, it grew around 4-5 times. It happened like it keeps going. So I think the behavioral system doesn't change roughly that much. So I (don't) guess mangosteen, not a few, it's an economic calculation that there is a mathematical equal," he said.

Purbaya menambahkan dunia ekonomi kerap menunjukkan hal-hal yang tampak mustahil, namun tetap bisa dijelaskan secara rasional jika dianalisis dengan pendekatan ilmiah.

"Ilmu ekonomi adalah ilmu yang menarik. Kalau anda pelajari dengan baik, anda bisa mencapai level yang tadi yang tinggi sekali yang seolah-olah mendekati dukun," ujarnya.

Purbaya added that the world of economics often shows things that seem impossible, but can still be explained rationally if analyzed with a scientific approach.

"Economic science is an interesting knowledge. If you study it well, you can reach the level that was very high, which seemed to approach a shaman," he said.