JCI Surges 404.51 Points or 7.57% to 5,746.65

The Jakarta Composite Index (JCI) on the Indonesia Stock Exchange (IDX) closed sharply higher on Tuesday (9/6), driven by a planned buyback programme for large-capitalisation state-owned enterprise (SOE) shares and a subsequent increase in Bank Indonesia’s benchmark interest rate. The JCI closed up 404.51 points, or 7.57%, at 5,746.65. Meanwhile, the LQ45 index of 45 leading stocks rose 42.24 points, or 8.01%, to 569.32. “Discussions and the planned buyback of big-cap shares such as members of Himbara (Indonesian State-Owned Banks Association), which is being planned, became the main sentiment,” said Infovesta Kapital Advisori Research Analyst Arjun Ajnawi. At a press conference on Tuesday morning, there were discussions between the Indonesian House of Representatives, Danantara Indonesia, Himbara, BPJS, and state-owned insurance companies regarding the share buyback programme plan for Himbara banks. “The DPR meeting with the Ministry of SOEs, Danantara, and Himbara together coordinated to maintain the stability of these shares amidst pressure and turmoil from both global and domestic sentiment,” said Arjun. During the second trading session today, Bank Indonesia announced a 25-basis-point increase in the BI-Rate to 5.50%, as an effort to strengthen rupiah exchange rate stability. This step is seen as affirming the policy priority of returning to exchange rate strengthening and anchoring inflation, while increasing the attractiveness of portfolio capital flows into Indonesia. In addition, the index’s rise was supported by commodity sector stocks as the government ensured there would be no gross split mechanism in the export scheme. Market fears that exporters are required to surrender part of their export proceeds to state intermediaries began to subside, reducing the risk of disruption to exporters’ cash flow. On the other hand, Arjun cautioned that the JCI’s significant strengthening in today’s trading would certainly give rise to potential profit-taking by market players, especially for Tuesday’s (10/6) trading tomorrow. “Because today’s strength is quite significant, there is potential for profit-taking,” said Arjun. Opening higher, the JCI remained in positive territory until the close of the first stock trading session. In the second session, the JCI continued to stay in the green zone until the close. Based on the IDX-IC Sectoral Indices, all eleven sectors strengthened, led by the raw materials sector which rose 9.71%, followed by the energy and industrial sectors which rose 9.04% and 8.24% respectively. The stocks experiencing the largest gains were BABY, AHAP, CTTH, MHKI, and PSKT. Meanwhile, stocks that weakened the most were GMTD, GRIA, CTBN, DPUM, and MPMX. Stock trading frequency was recorded at 2,714,279 transactions, with 45.06 billion shares traded, valued at IDR 27.93 trillion. A total of 678 stocks rose, 89 stocks fell, and 48 were unchanged. Regional Asian stock markets this afternoon saw the Nikkei Index strengthen by 1.92% to 65,251.00, the Shanghai Index rise by 1.28% to 4,010.03, the Hang Seng Index weaken by 0.37% to 24,565.90, and the Straits Times Index strengthen by 1.20% to 5,023.67.