JCI Projected Weakening Wednesday, Analyst Recommends Pakuwon And HM Sampoerna Stocks

JAKARTA - The movement of the Composite Stock Price Index (JCI) in today's trading, Wednesday, October 13, has the potential to experience a limited correction, after closing up 0.41 percent yesterday to a level of 6,486.

PT Pilarmas Investindo Sekuritas analyst, Maximilianus Nico Demus, said that the JCI movement in today's trading has the potential to weaken based on technical analysis.

"We see that the JCI currently has a limited opportunity to move lower and is traded in the range of 6,432-6,507," said Nico Demus in his research.

He said the JCI movement will be overshadowed by negative sentiment related to the economic slowdown in China, which Beijing has responded to by implementing strict fiscal policy and has not opened additional stimulus in an effort to encourage economic growth.

According to Nico Demus, China also has the potential to experience an increase in economic risk, if too much support for Evergrande and other property companies is affected by the economic slowdown. But if it doesn't help Evergrande, it has the potential to put more pressure on the financial system.

"Amid the already visible potential slowdown in China, the IMF has also recently warned of the risk of a sudden and sharp decline in global equity prices and housing values," said Nico Demus.

Meanwhile, from within the country, he continued, there was negative sentiment regarding the inflation rate which was maintained at a stable position, even though the increase in raw material prices was an early indication of an impending increase in inflation.

"Bank Indonesia projects that the inflation rate in October 2021 will still be maintained at the level of 0.05 percent (mtm). So if this projection can be realized, the estimated inflation in October 2021 will rise to 0.85 percent (ytd) and 1.59 percent (yoy), " he said.

In today's trading, said Nico Demus, Pilarmas Sekuritas recommends investors to accumulate shares in PT Pakuwon Jati Tbk (PWON), PT HM Sampoerna Tbk (HMSP), and PT Wismilak Inti Makmur Tbk (WIIM).