National strikes by Indonesian thousands of workers and students had protested peacefully across the archipelago on Tuesday at the start of a three-day national strike against president Joko Widodo’ omnibus law on job creation bill - Photo by TheInsiderStories

Jakarta (TheInsiderStories) – Political turmoils have taken its toll into the capital markets, with foreigners appeared to have sold more shares than they bought since last week. According to data from RTI, foreigners sold Rp1.89 trillion (US$134.04 million) shares than they bought in one-week period until Sept. 30.

Students demonstration intensified since Sept. 23, as they voiced out their anger about the stamped revision of the anti-corruption law and the planned revision of Indonesia’s criminal code law.

Laksono Widodo, a director at the Indonesia Stock Exchange, or known as IDX, said demonstrations could sparks concerns of foreigners to invest in Indonesia. He said they are very sensitive to such political issues.

However, Maximilianus Nico, an analyst from Pilarmas Sekuritas Investindo rated that the capital outflow that occurred was caused by investors moving their portfolio investment from stocks, a riskier assets, into bonds, which offer a fixed income. He noted, foreign ownership for Indonesian government and corporate bonds increased, and vice versa for the local stocks.

Despite of the rising political tensions, he believed, until the end of the year, the Jakarta Composite Index, will still have positive performance. While, Mega Investama analyst Hans Kwee said another issue that lead to capital outflows include the United States (US) – China trade war, the issues about impeachment of Donald Trump and and the Brexit problems in England.

He said the JCI has been performing weaker last week. On Monday, the index declined to 0.45 percent to 6,169.10. On the same day, a student alliance held a rally in front of the House of Representative Building in South Jakarta.

This demonstration coincided with the last Plenary Meeting by the lawmaker for the 2014 – 2019 period. Quoting a local media source, the alliance comprises of a number of universities in Jakarta and other regions. As many as 20,500 personnels were stationed to safeguard the House building on Monday.

The Jakarta Police spokesperson Argo Yuwono said, as quoted by the local media, that the police’ personnels are joint by units using tactical vehicles. They are also equipped with water canon.

US$1: Rp14,100

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