Analyst Warns Investor Fund Flows Sensitive to US-Iran Developments
Jakarta (ANTARA) - Capital market analyst Reydi Octa has warned that uncertainties in the direction of the global economy and geopolitics remain high at present.
High interest rates and volatility in oil prices due to the conflict between the United States (US) and Iran are, in his view, causing investors to diversify into defensive assets such as gold and bonds, while avoiding risky assets.
“Fund flows will be highly sensitive to developments in the conflict and inflation,” Reydi stated when contacted by ANTARA in Jakarta on Wednesday.
He projected that global interest rates could remain higher for longer and oil prices will stay volatile depending on geopolitical escalation, making the US-Iran conflict the main market driver for now.
“If tensions ease, the market could rebound; if escalation occurs, pressure will dominate again,” Reydi said.
Trading data for today, Wednesday (25/03), shows the Composite Stock Price Index (IHSG) moving higher in line with gains in Asian stock markets.
Reydi explained that the IHSG’s strengthening was driven by a combination of technical rebound following the long Eid al-Fitr holiday, improving global sentiment, and rotation into the energy sector and non-primary consumer goods sector.
“In addition, easing geopolitical tensions and falling oil prices are providing room for the IHSG to rise again,” Reydi said.
According to him, investors are now tending to re-enter the Indonesian stock market gradually (capital inflow), but remain selective and cautious.
“Foreign investors are not yet aggressive, still in a phase of limited accumulation while awaiting certainty on global direction and macroeconomic stability,” Reydi said.
Trading data as of 3:25 PM WIB today shows the IHSG strengthening by 146.93 points or 2.07 percent to 7,253.77.
Meanwhile, regional Asian stock markets, including the Nikkei index, strengthened by 1,474.72 points or 2.82 percent to 53,727.00; the Shanghai index strengthened by 50.56 points or 1.30 percent to 3,931.84; the Hang Seng index strengthened by 217.79 points or 0.87 percent to 25,281.50; and the Straits Times index strengthened by 34.54 points or 0.71 percent to 4,896.97.