Indonesia’s benchmark stock index dropped more than 1 percent on Tuesday, amid worries over domestic political tensions. Thousands gathered in the front and back entrances to Jakarta's parliament building as protests against the government and the House of Representatives’ policy to amend several crucial laws spread across the archipelago. The index dropped 1.11 percent to 6,137 by the closing bell with foreign investors dumping Rp 773.2 billion (US$54.8 million) worth of shares on the day. As recorded by the IDX, stock circulation on Tuesday reached Rp 7.87 trillion. Foreign buy amounted to Rp 1.97 trillion, while foreign sell was recorded at Rp 2.74 trillion.
PT Samuel Sekuritas Indonesia Chief Researcher Suria Dharma said that the high foreign sell was partly prompted by the protests. "The Jakarta Composite Index (JCI) was the only one that fell in Asia, and I think it's because of the potentially prolonged protests," said Mr. Dharma as quoted by CNBC Indonesia. The main stock exchanges in the Asian region move compactly in the green zone. The Shanghai index rose 0.28%, the Hang Seng index rose 0.22%, the Straits Times index rose 0.39%, the Kospi index rose 0.45% and the Nikkei index edged up 0.09%.
Despite the clash, unseen positive catalyst from the nation’s economy becomes one sentiment affecting foreign investors packed their bags. Throughout the second quarter of 2019, the economy only grows 5.05% (YoY) compare to the same period in 2018 which holds 5.27%. Concurrently, external sentiment also outweighed domestic factors. Pilarmas Investindo Sekuritas research director Maximilianus Nico Demus sees that investors tend to focus on global developments, particularly the United States and China, rather than the Corruption Eradication Commission (KPK) Law issue, referring to the world’s two largest economies that have been embroiled in a trade spat. However, investors have still booked net buys of Rp 52.93 trillion so far this year despite JCI’s under selling pressure.
Sources:
The Jakarta Post
CNN Indonesia