JAKARTA - The Composite Stock Price Index (JCI) has the potential to strengthen in June 2025, breaking the resistance level of 7,300. Kiwoom Sekuritas in his research assessed that sentiment driving the JCI was derived from the government's fiscal stimulus, stability of the rupiah exchange rate, and the potential for larger foreign fund inflows.
According to Kiwoom Sekuritas, the JCI has historically tended to record a positive performance every June since 2020. Based on this pattern, Kiwoom projects that the JCI will move sideways to strengthen, with a range of 7,000-7,300.
"If it is supported by a consistent foreign net buy, strengthening the Rupiah, and window dressing sentiment towards the end of the semester, it is not impossible that the JCI will successfully break out from resistance of 7,300," explained Kiwoom Sekuritas.
One of the main drivers of market optimism is the launch of six stimulus policies by the government starting June 5, 2025, which include wage subsidy assistance (BSU), food assistance, as well as discounted electricity and transportation rates.
In addition, the momentum of long school holidays and discounted toll rates are also expected to increase household consumption and encourage the transportation and tourism sector.
Kiwoom also observed cutting the deposit guarantee interest rate by the Deposit Insurance Corporation (LPS) from 4.25 percent to 4.00 percent, which is a signal of easing liquidity and triggering the rotation of assets from deposits to risky instruments such as stocks.
From a monetary perspective, cutting the BI Rate interest rate to 5.50 percent provides additional space for banks and the real sector.
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Meanwhile, the direction of the Fed policy awaited at the FOMC Meeting June-July is an important external factor. Although the probability of cutting the US benchmark interest rate is still below 50 percent, if the Fed starts hinting at the dovish attitude, the capital flow to emerging markets like Indonesia has the potential to increase.
Kiwoom also sees opportunities to strengthen the rupiah exchange rate to the level of IDR 16,000 per US dollar, especially if the Fed starts showing a pivot signal. Exchange rate stability will strengthen the confidence of foreign investors in domestic assets, both in the stock market and in bonds.
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