Economist: The Indonesian Capital Market In 2023 Has A Good Prospect Despite Global Uncertainty

Illustration. (Photo: Doc. Antara)

JAKARTA - Mirae Asset Sekuritas economist Rully Arya Wisnubroto assesses that the prospects for the Indonesian stock market are quite good in 2024 despite the challenges of global uncertainty.

"We feel that the stock market prospects are still quite good next year, assuming there is an aggressive reduction in interest rates by the central bank, the Fed and Bank Indonesia," said Rully, quoted from Antara, Tuesday 12 December.

He said that one thing to watch out for is the potential for quite large volatility if it turns out that the reduction in interest rates is not as big as expected. "Retail investors must carefully look at the fundamental condition of the company, and don't fight foreign flows," he said.

Apart from the stock market prospects which are expected to be quite good next year, Rully projects that the bond market will also be quite good, with expectations of a reduction in interest rates.

On the other hand, his party views that based on historical data from the last 20 years, it appears that economic growth is more influenced by global economic conditions.

He is quite optimistic that the domestic political situation will remain conducive during next year's general elections. However, the general election will not have a significant impact on economic growth.

On the other hand, there is a big opportunity for accelerated growth in the next few years, provided that the new government will implement various policies to accelerate growth and maintain political stability simultaneously.

Previously, the Governor of Bank Indonesia (BI) Perry Warjiyo at the 2023 Bank Indonesia Annual Meeting press conference in Jakarta, Wednesday 29 November, predicted that the United States (US) Central Bank, the Fed, would reduce its benchmark interest rate by 50 basis points (bps) in the second semester 2024.

The decline in inflation in several developed countries, including the US, will still be slow next year, even though monetary policy has been tightened very aggressively.

Meanwhile, Bank Indonesia will maintain its benchmark interest rate (BI-7 Days Reverse Repo Rate/BI7DDR) in 2024, because global conditions are still volatile and uncertainty is still high.

Currently, the central bank's benchmark interest rate is at 6 percent, after being raised in October 2023 to maintain the rupiah which was experiencing pressure.

The Indonesian Stock Exchange (BEI) targets net profit to reach IDR 259.44 billion in 2024, with profit before tax targeted at IDR 316.44 billion.

"The total business income that BEI will receive is IDR 153.38 billion or an increase of 11.86 percent to IDR 1.45 trillion in 2024," said BEI President Director Iman Rachman in a press conference after the Extraordinary General Meeting of Shareholders (EGMS) in Jakarta, Thursday, October 26.