Mirae Asset Sekuritas Predicts JCI Can Strengthen To 6,200

Illustration. (Photo: Unsplash)

JAKARTA - PT Mirae Asset Sekuritas Indonesia is optimistic that the announcement of the financial performance of issuers in the second quarter of 2021 on the stock exchange can make the Jakarta Composite Index (JCI) stay above the psychological level of 6,000 and even strengthen to close to 6,200, to be exact, 6,195.

Mirae Asset Sekuritas' Senior Investment Information, Martha Christina, assessed that the strengthening of the domestic stock index is predicted to be realized even though it is limited by the risk of the continued increase in the number of new cases of COVID-19 patients domestically and globally. The prediction of the JCI strengthening is also based on technical analysis with reference to support at 5,985-5,884 and resistance at 6,115-6,134.

"This optimistic prediction is supported by the release of the company's financial statements for the second quarter of 2021, which is expected to continue to grow, given the low base effect that occurred in the second quarter of last year," Martha said in a virtual press conference, Thursday, July 8.

As a reference, the JCI was still able to strengthen in June with an increase of 0.6 percent on a monthly basis amid soaring COVID-19 cases in the country. Calculated from the beginning of the year, the JCI tends to be flat with a slight increase of 0.1 percent. The performance of the major domestic stock indices was supported by positive economic data such as the Manufacturing PMI showing expansion, increasing retail sales and improving consumer confidence index (IKK).

However, there was another concern from market participants from the negative side when entering the second semester. The concern is that economic growth in the second half of 2021 is believed to start to slow down, especially in the third quarter of 2021, which is also a risk.

The main reason is the surge in COVID-19 cases whose daily figures continue to print at the highest level, prompting the government to implement Emergency PPKM in Java and Bali for the period from July 3 to July 20.

Emergency PPKM will certainly have an impact on the demand for goods and services. Therefore, economist Mirae Asset Sekuritas estimates that Indonesia's economic growth this year will be at the level of 4.15 percent, below the government's target of 4.5-5.3 percent.

Despite the risks from COVID-19 and slowing economic growth, the Mirae Asset Sekuritas Investment Information Team still assesses that there are sectors that investors can choose to trade shares in this July, namely the primary consumer sector, health, and infrastructure.

Poultry and animal feed issuers in the primary consumer sector are PT Japfa Comfeed Tbk (JPFA) and PT Malindo Feedmill Tbk (MAIN). Then the preferred stocks in the health sector are hospital and laboratory operators, namely PT Mitra Keluarga Karyasehat Tbk (MIKA), PT Medikaloka Hermina Tbk (HEAL), and PT Prodia Widyahusada Tbk (PRDA).

The preferred stocks in the infrastructure sector are PT Telekomunikasi Indonesia Tbk (TLKM), PT XL Axiata Tbk (EXCL), and PT Indosat Tbk (ISAT). Then there are several other stock options that are also worth observing, namely PT Bank Tabungan Negara Tbk (BBTN), PT Erajaya Swasembada Tbk (ERAA), PT AKR Corporindo Tbk (AKRA), and PT Indofood Sukses Makmur Tbk (INDF).

"Business in particular for the four issuers, namely BBTN, ERAA, AKRA, and INDF, is predicted to continue to improve and increase in the second semester of 2021," said Martha.