Analyst: JCI Correction Driven by Investors Reducing Exposure to Risky Assets

Jakarta (ANTARA) – Capital market analyst Elandry Pratama said the Jakarta Composite Index (JCI) had weakened as investors adopted a risk-off stance, reducing their exposure to risky assets amid a combination of global and domestic factors.

He said pressure from capital outflows and concerns about the outlook for Indonesia’s capital market had intensified selling on the domestic stock market.

“Market movements have also been influenced by liquidity conditions and profit-taking in large-cap shares,” Elandry told ANTARA in Jakarta on Thursday.

Elandry said global investors were currently becoming more selective and cautious in allocating their funds, particularly to emerging markets.

Domestic investors, meanwhile, could adopt a wait-and-see approach while monitoring the JCI’s stability and developments in domestic stock-market sentiment.

“However, investors’ responses are not uniform; some continue to see opportunities to accumulate shares with attractive fundamentals and valuations,” Elandry said.

On the sectors weighing on the index, Elandry said pressure was generally being driven by financial-sector shares, particularly large-cap banks, as well as energy and infrastructure stocks and shares in conglomerates that had come under selling pressure.

“To identify which sectors weighed most heavily on today’s trading, it is necessary to examine each share’s contribution to the index’s decline, rather than only the size of its percentage price correction,” Elandry said.

In the short to medium term, Elandry forecast that the JCI could remain volatile and sensitive to global sentiment, foreign fund flows and regulatory policy.

He said a more sustained recovery would require capital flows to stabilise, investor confidence to improve and listed companies’ fundamentals to provide support.

“Investors should remain disciplined in managing risk, avoid rushing to average down, and pay attention to shares with strong fundamentals and more reasonable valuations,” Elandry said.

Indonesia Stock Exchange (IDX) trading data at 14:25 Western Indonesia Time on Thursday (29 October) showed the JCI down 151.13 points, or 2.86 per cent, at 5,131.18. The LQ45 Index, which tracks 45 leading shares, fell 17.83 points, or 3.31 per cent, to 521.64.

Share trading was recorded at 962,000 transactions, involving 16.22 billion shares worth Rp7.10 trillion. A total of 94 shares rose, 648 fell and 221 were unchanged.