Game On

IDX chief Inarno Djajadi is determined to see the Indonesian bourse remain solid amidst election year and global volatility.

- Ester Christine Natalia

For the past decade the Indonesia Stock Exchange (IDX) has showed a stellar performance, with the composite index (IHSG) growing over 140% from 2,534 in end of 2009 to 6,194 in 2018. The stock market also enjoyed a bullish rally in 2018, hitting a historical record of 6,689 in mid-February.

However, the index soon started to slide downward and became unstable soon after investors sought for a safe haven in the wake of the U.S. Federal Reserve decision to normalize interest rates. It even nosedived to 5,633 in July, the lowest level since May 2017. The index has since not been able to fully recover from the drastic decline when the trading closed at 6,194 at the end of December.

The Fed is forecasted to raise its interest rates again this year in a move that could potentially put pressure on the IHSG and the rupiah. Chief Economist of Bank Central Asia (BCA) David Sumual predicted that tension from the trade war between the U.S. and China would exacerbate, further sending headwinds to the global market, especially emerging ones, including Indonesia.

“I think investors are still taking a wait-and-see stance over post-election government regulations,” he tells Forbes Indonesia, adding that all still depends on external factors. “But in 2019 the trend in the economy is downward.”