Foreign Investors Recorded Inflows at the Beginning of 2023


Bank Indonesia published its latest report. Foreign investors were noted to be active in investing their capital in Indonesia in early 2023 or recording inflows. This is a good thing after foreign investors recorded an outflow at the end of 2022.

BI noted that in the period 2 – 5 January 2023, non-residents on the domestic financial market bought a net of IDR 8.05 trillion.

Looking at it in more detail, the portion of government securities (SBN) is indeed quite large, namely IDR 9.74 trillion. Meanwhile, on the stock market, investors tend to come out with net sales of IDR 1.68 trillion.

During 2023, based on settlement data up to. January 5, 2023, non-residents bought IDR 6.68 trillion net on the SBN market and sold IDR 2.91 trillion net on the stock market.

Foreign entry was driven by domestic economic data which continued to improve. This can be seen from Indonesia’s 5-year CDS premium which fell to 95.01 bps as of 5 January 2023 from 101.23 bps as of 30 December 2022. Other data shows that the yield on 10-year SBN rose to 6.99%.

On the other hand, after being corrected several times at the beginning of the 2023 New Year’s week, finally at the close of trading on Friday (06/01/2022), the JCI managed to close in the green zone or rose 0.46% to a level of 6,684.55 with a transaction value of Rp. 9.19 trillion.

Nevertheless, cumulatively at the beginning of this week, the JCI still recorded a non-positive performance with a 2.42% decline, which was followed by a net sell-off by foreigners on the Indonesian stock market reaching IDR 1.69 trillion.

However, amid the incessant foreign investment in releasing their ownership in the Indonesian stock market, foreigners have been secretly accumulating shares of gold-producing issuers at the beginning of this week in 2023.

Furthermore, the number of mutual fund investors is predicted to continue to grow and soon reach 20 million investors from the current 9.6 million investors as of December 2022.

This surge was supported by the role of the millennial and Z generations along with increasing public awareness to invest, regulatory and infrastructure support by the authorities, and various innovations by industry players in line with the digitalization trend.

According to data from the Indonesian Central Securities Depository (KSEI), the number of capital market investors in December 2022 reached 10.31 million investors, an increase of 37.68% compared to 2021 of 7.48 million investors.

The number of Indonesian capital market investors managed to soar past 10 million in early November 2022. This increase was mainly supported by the number of mutual fund investors which shot up 40.41% throughout 2022.

The growth in the number of mutual fund investors was also driven by the role of the financial technology industry (fintech), where as of December 28, 2022, the number of investors investing through fintech selling agents reached 8.05 million, or as much as 78.17% of capital market investors also invested through fintech.