"Some investors have started examining the next economys fundamentals, despite their expectations of credible ministerial cabinet (under President Joko Widodos leadership)," said a member of the AAEI, Pardomuan Sihombing, here on Thursday.
Pardomuan added that the investors also looked at the performance of the listed stocks in the third quarter of 2014, and while growth was continuing, the performance was sluggish as shown by the volatile domestic index.
"Usually, ahead of the issuers performance report, the Indonesian Composite Index (IHSG) climbs up. But on an average, it is estimated to grow by 15 percent or less than last year when it had reached 20 percent," he said.
Pardomuan explained further that the market did not respond overwhelmingly to the sentiment created by the issuers performance. The foreign investors were rather slow to react as they tend to halt the inflow. Even during the last few days, they recorded around Rp8 trillion worth of net trading.
Echoing Pardomuan, David Nathanael Sutyanto, an analyst at the First Asia Capital, said the market sentiment had turned into a review of fundamentals ahead of the hike in subsidized oil fuel price.
David added that the plan to raise the subsidized oil fuel price, would in the long term improve the Indonesian economic fundamentals, but the government still needed to anticipate its short-term negative effects.
"The sentiment created by subsidized oil fuel price is quite crucial as it will have an impact on the inflation, and the market will therefore await policy action by the government to overcome the impact of the price hike," he explained.
The market also waited for the government to make a commitment to push for infrastructural building in Indonesia once the price of subsidized fuel is raised.
Besides the domestic situation, David said the market was also concerned about the global economic situation, related to the Feds plan to raise the rate.
The hike in the Fed rate could result in withdrawal of foreign funds from Indonesia, thus negatively impacting the stocks market.(*)
Editor: Heru Purwanto
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