Decreased Trust In The Government's Attitude To Create Investors Refuses To Plant Capital In Indonesia

Illustration: Photo: Doc. ANTARA

Political turmoil in the last two days has become a bad signal for financial markets and the real sector in Indonesia. Decreasing trust in the government's attitude makes investors refuse to invest in Indonesia.

Director of Digital Economy, Center of Economic and Law Studies (Celios), Nailul Huda, assessed that this situation cannot be separated from the government's attitude which is considered indifferent to the reality of society. This condition reduces investor confidence. Especially in the real sector.

"Real sector investors will also refrain from entering Indonesia. Seeing the chaos caused by the government's indifferent attitude towards the reality of society, I'm sure investors won't believe it anymore," he told VOI, Friday, August 29.

Nailul believes investors will not believe in investing in Indonesia in a situation like today. Except, he continued, the investor is close to the circle of power.

"As a result, investors will refrain from investing in Indonesia. Except for investors who are part of the government's oligarchy," said Nailul.

In addition, Nailul said that recent political turmoil forced the Composite Stock Price Index (JCI) to grapple in the red zone. He said investors read the current situation as political uncertainty which immediately affected economic stability.

Investors will definitely see events in these two days as negative sentiment that will cause capital outflows. Even retail investors will also take similar actions," he said.

Political instability will create economic instability. In the end, it will affect Indonesia's business conditions. JCI will definitely redden," continued Nailul.

Previously, it was previously reported that the Composite Stock Price Index (JCI) closed down 1.53 percent or 121.59 points to 7,830.49 until the end of trading on the Indonesia Stock Exchange (IDX), on Friday, August 29, following the increasing escalation of demonstrations.

Throughout the day, JCI moved at its lowest level at 7,765.59 or 2.34 percent compared to the previous closure. Meanwhile, the highest level was at 7,913.86.

Of all sectoral indexes, only the industrial sector is able to survive in the green zone with an increase of 0.73 percent.

Meanwhile, other sectors have weakened in line with the decline in the JCI.

Pelemahan terdalam tercatat pada sektor barang konsumen siklikal yang merosot 3,06 persen, disusul oleh sektor infrastruktur yang turun 2,27 persen, serta sektor teknologi yang melemah 2,25 persen

Selanjutnya, total volume transaksi bursa mencapai 50,86 miliar saham dengan nilai transaksi Rp22,29 triliun.

Serta sebanyak 122 saham naik, 610 saham turun, dan 70 saham stagnan.

The deepest weakening was recorded in the cyclic consumer goods sector, which fell 3.06 percent, followed by the infrastructure sector which fell 2.27 percent, and the technology sector which weakened 2.25 percent.

Furthermore, the total volume of exchange transactions reached 50.86 billion shares with a transaction value of IDR 22.29 trillion.

And as many as 122 stocks rose, 610 stocks fell, and 70 stocks were stagnant.