JAKARTA - The movement of the Jakarta Composite Index (JCI) is predicted to be more bullish in June 2022 than the previous month. This was stated by the Head of Research at Ciptadana Sekuritas Asia Arief Budiman in his research.
Arief explained, after strengthening for 4 consecutive months, the JCI recorded a monthly correction in May 2022. The Sell in May and Go Away sentiment became the market's attention in line with the correction that occurred in the global market.
At the close of trading on Tuesday, May 31, the JCI rose 111.4 points or 1.58 percent to a level of 7.148.97. However, throughout May 2022, the JCI corrected 1.11 percent and moved in the lowest range of 6509.87 and the highest at 7.148.97 during May 2022.
According to him, the correction in the stock market occurred in line with the Fed's decision to raise interest rates in early May. This made the cost of credit and access to capital initially cheap and triggered a rally in the stock market to begin to decrease. However, the outlook for the JCI movement in June is still considered quite positive.
The trend of high commodity prices is a support for the Indonesian market facing stagflation, a condition in which high inflation rates are accompanied by slowing economic growth.
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"The Indonesian stock market is also more protected from stagflation thanks to the composition of listed companies coming from banking as much as 26 percent and commodities by 19 percent covering 45 percent of Indonesia's total market capitalization," Arief explained in his research.
Arief continued, this commodity price trend will also be a positive catalyst for listed companies in Indonesia. He estimates that commodity price sentiment will have an impact on the company's performance until 2023. Ciptadana Sekuritas is also still optimistic that the JCI will be positive until the end of 2022 with a target of 7.600.
This positive trend was supported by the influx of foreign investors who saw the positive sentiment from Indonesia's macroeconomy and growth in revenues from listed companies.
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