The Covid-19 pandemic, which has begun to be controlled by the government, has attracted foreign investors to re-invest their assets in Indonesia. Last July, foreign investors recorded a net sell of Rp 2.19 trillion on the Indonesia stock exchange (IDX).
Based on data from the Indonesia Stock Exchange (IDX), foreign investors bought Indonesian shares totaling Rp 65.4 trillion cumulatively last July.
Meanwhile, at the same time, foreigners also sold Indonesian shares with a value of Rp 67.6 trillion, which is greater than the purchase value.
Selling pressure was felt in the first and second weeks of July. In the period 4-8 July 2022, foreign net sells Rp 2.5 trillion.
Foreign selling continued in the second week with a net sell value smaller than the first week of Rp 1.6 trillion. The sentiment that moves the stock market still comes from the US.
US inflation rose at a 9% annualized pace in June, prompting investors to flee risky assets for fear that the Fed will be more aggressive in raising benchmark interest rates. Even up to 100 basis points (bps).
However, this anxiety has subsided because many believe that too aggressive monetary tightening will only have an impact on financial distress.
Furthermore, despite rising inflation, Bank Indonesia (BI) still holds its benchmark interest rate, which makes the valuation of domestic financial assets less attractive.
Stocks, government bonds, and even the rupiah weakened at that time. Over time, pressure from the supply side has begun to ease and inflation is estimated to have reached its peak.
Bank Indonesia (BI) also continues to communicate that inflation in Indonesia is because the national central bank relies more on core inflation data, which is still moving in the 2-4% range.
The flow of foreign funds began to enter the Indonesian stock market. In the third week of July, foreign net buys were thin at IDR 40.9 billion and then the flow of foreign funds again flooded the stock market in the fourth week in line with the Fed’s policy which was in line with market forecasts.
For information, foreigners recorded a net buy of Rp 1.9 trillion in the stock market. Even in early August, the stock market still recorded an inflow.
Yesterday, foreign investors recorded a net buy of Rp 863.4 billion in the regular market. If accumulated, foreign net buys in the Indonesian stock market amounted to Rp 48.2 trillion this year.