Observer: Less Likely The JCI Will Drop Below Level 7,000 Due To Middle East Conflict

Illustration. (Photo: Doc. Antara)

Capital market observer at the University of Indonesia (UI) Budi Frensidy said it is unlikely that the Composite Stock Price Index (JCI) will drop to below the level of 7,000 due to market negative sentiment towards geopolitical conflicts in the Middle East.

"I think the JCI at 7,050 to 7,100 is a natural thing, although the numbers are low, and it is unlikely to drop below 7,000," said Budi Frensidy, quoted from Antara, Saturday, April 20.

Regarding the impact of the Iran-Israeli conflict on stock transactions, he said the most affected stock groups were shares of issuers who had both export and import product weights and large debt value in the US dollar.

Meanwhile, the stock groups sold by issuers whose raw materials and main markets of their products are domestically and do not have or only have a small amount of debt in the Rupiah are not significantly affected.

In addition to stocks, he said that the Iran-Israel conflict also affected other capital market products, namely bonds.

"The bonds were also depressed by the occurrence of capital outflows (outflows) due to the weakening Rupiah," said Budi.

He said that the weakened rupiah made the yield demanded by investors increase so that the price of the bond market decreased.

He also advised investors to be selective in buying and selling capital market products because of high volatility.

"Always hold at least 30 percent (of the investment products you have) as cash on hand," said Budi.

The latest conflict between Iran and Israel was triggered by an attack on the Iranian Consulate in Damascus, Syria on April 1, 2024.

Iran then launched a counter-attack by firing hundreds of ballistic missiles and unmanned aircraft at Israel on April 13, 2024.

In the early hours of Friday, April 19, Israel launched a missile that allegedly targeted an air base near Isfahan City, Iran.

Meanwhile, in the closing of trading on Friday afternoon April 19, the JCI closed down 79.49 points or 1.11 percent to 7,087.31. Meanwhile, the group of 45 leading shares or the LQ45 index fell 15.20 points or 1.62 percent to 920.31.