Indonesian government looking to sell Samurai and Eurobonds in the second semester (2H) of 2020 to fund the fiscal deficit, said finance ministry' official on Thursday (06/04) - Photo by ING

JAKARTA (TheInsiderStories) – News about Indonesia’ inflation easing could not lift market sentiments as the Rupiah and the country’ benchmark stock index (JCI) continued their decline.

The Rupiah slipped by 0.06 percent on Monday (10/01) to 14,198 against the US Dollar, according to data from Reuters. Meanwhile, the stock Index also was closed 0.5 percent lower at 6,138.25 on Monday’ closing.

“Today’ decline is still related to demonstrations. There is still a lot of uncertainties within the country. Tomorrow, the JCI has a potential to continue its decline in the 6,104-6,180 territory,” Panin Sekuritas analyst William Hartanto said.

As much as 14.4 billion shares worth Rp6.9 trillion (US$489.36 million) changed hands. As many as 236 stocks declined, while 174 stocks increased.

All range of sectors, from mining, agriculture, basic industry and chemicals to consumer goods and finance performed poorly on Monday. Foreign investors sold Rp607.2 billion more shares than they bought.

Protests still took place on Monday, although not as big as in the previous days. Indonesia has seen a widespread protests in the capital as well as other cities all over the nation after lawmakers unveiled a series of legal reforms considered as moves to restrain civil freedom and weaken the country’ graft buster agency.

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 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, theJakarta 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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