June 14, 2020, 10.31 PM
The Indonesia Composite Index at the Indonesia Stock Exchange Building in Jakarta. KOMPAS.com/GARRY LOTULUNGThe Indonesia Composite Index at the Indonesia Stock Exchange Building in Jakarta.

JAKARTA, KOMPAS.com - The Indonesian composite index (ICI) of the Indonesia Stock Exchange (IDX) is expected to rise next week following positive market sentiments stemming from the increased foreign exchange reserve. The index closed at 25.60 points or 0.53 percent to 4,880.36 on Friday (June 12).

Director of Anugerah Mega Investama Hans Kwee said that the positive market sentiments are driven by the increased foreign exchange reserve which is indicated to derive from the flows of foreign money into the Indonesian market.

Besides, Hans said, the government policy on easing the large-scale social restrictions has a positive influence on the index.

“We expect the ICI to strengthen at the beginning of the week and there is a chance of corrections by the end of the week,” said Hans on Sunday (June 14).

Also read: Indonesian Economy Projected to Shrink 3.9 percent If Second Wave Hits

However, the economic outlook of the Organization for Economic Cooperation and Development (OECD) and the World Bank will cause negative sentiment. This will be a concern in the market because it gives signals to a potential slowdown in company profits.

Meanwhile, the global financial market was concerned about the potential of a second wave of COVID-19 following the increasing number of confirmed cases in California, Texas, and Arizona.

“The concerns over the spread of coronavirus get worse following George Floyd protests across the United States that potentially increase the number of new confirmed cases,” he said.

Also read: 100 Days of Coronavirus in Indonesia: Lessons and Good News

A pessimistic tone emerged after The Federal Reserve (Fed) made a statement that economic recovery needs time and the potential for the decline in the American economy creates negative market sentiments.

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