Economist: JCI Weakness Driven More by Fundamentals Than Political Narrative

Surya Vandiantara, an economist at the University of Muhammadiyah Bengkulu, believes that narratives linking the weakening of the Jakarta Composite Index (IHSG) to the Head of State’s speeches are inaccurate. According to him, theoretically, the movement of the IHSG is more heavily influenced by fundamental factors, particularly the performance of companies listed on the stock exchange.

“If the majority of companies listed on the exchange experience a decline in revenue or incur losses, it is only natural for the IHSG value to decrease,” said Surya.

However, he noted an anomaly in the movement of the IHSG. He observed that while the performance of most listed companies tends to remain stable and macroeconomic indicators show positive conditions, the IHSG has nonetheless experienced a decline.

Surya highlighted the emergence of widespread narratives linking the IHSG’s decline to the President’s speeches. In his view, this situation indicates the presence of other factors influencing market movements.

“This narrative indicates the presence of rogue investors performing irrational actions in the stock exchange, causing the IHSG value to drop. It is evident that this decline in the IHSG is being linked to political agendas intended to discredit the President,” he stated.

He assessed that the actions of these irrational investors have the potential to damage healthy market mechanisms. Such conditions not only harm investors who have conducted proper fundamental analysis but can also have a negative impact on companies listed on the exchange.

“In pursuit of hidden, dirty political agendas, they have harmed many parties,” he added.

Consequently, Surya urged the public not to be easily swayed by the developing narratives regarding the IHSG’s weakness. He also called on the government to take firm action against parties engaging in activities deemed to damage market mechanisms.

“The government must be brave enough to take decisive action against the irrational behaviour of rogue investors driven by political agendas, in order to protect the wider public,” he concluded.