Economist: JCI Weakness Driven More by Fundamentals Than Political Narrative

An economist from the University of Muhammadiyah Bengkulu, Surya Vandiantara, has assessed that narratives linking the weakening of the Jakarta Composite Index (JCI) to the head of state’s speech are inaccurate. According to him, in theory, JCI movements are more influenced by fundamental factors, particularly the performance of listed companies on the exchange. “If the majority of companies listed on the stock exchange experience a decline in revenue or losses, then it is only natural that the JCI value also falls,” Surya said. However, he observed an anomaly in the JCI’s movement. He noted that the performance of the majority of companies on the exchange tends to be stable and macroeconomic indicators also show positive conditions, yet the JCI has weakened. Surya highlighted the emergence of a massive narrative linking the JCI decline to the head of state’s speech. According to him, this condition indicates the presence of other factors influencing market movements. “This narrative indicates the existence of rogue investors carrying out irrational actions on the exchange, causing the JCI value to decline. It is evident that this JCI drop is then being linked to a political agenda discrediting the President,” he stated. He assessed that the actions of these irrational investors have the potential to damage healthy market mechanisms. Besides harming investors who have conducted proper fundamental analysis, this condition can also negatively impact companies listed on the exchange. “To achieve a hidden, dirty political agenda, they have harmed many parties,” he said. Therefore, Surya urged the public not to be easily swayed by the developing narratives regarding the JCI weakening. He also called on the government to take firm action against parties engaging in activities deemed damaging to market mechanisms. “The government must dare to take firm action against the irrational behaviour of rogue investors with political agendas, in order to protect the wider community,” he stated.