JAKARTA (Yosefardi) – Composite index of the Indonesia Stock Exchange gained 0.2% to 5372 this morning, extending yesterday gain, with tax amnesty program boosting the market sentiment.
While Asian shares edged lower in early trading on Tuesday, taking their cues from a modestly lower day on Wall Street as U.S. crude oil prices slid, Reuters reported.
Nymex’s crude oil rose 0.27% to US$40.17 per barrel in Asian trading this morning while gold declined 0.29% to US$1,355.60 per ounce.
IDX gained 2.79% to close at 5361 Monday (August 1), with trading value reaching Rp10.26 trillion. Foreign investors booked net buy of Rp1.83 trillion, bringing year to date net buy to Rp26.7 trillion. Foreign investors’ appetite for Indonesian assets was growing amid slowing global economic growth.
Many factors are positive for Indonesian stock market. The main driver is tax amnesty program which have attracted the capital inflow in current times. President Joko Widodo (Jokowi) was very proud that unexpectedly 10,000 participants attending the socialisation on tax amnesty held on Monday (August 1) in Kemayoran, Jakarta.
Other factors boosting the buying in local stocks are the lower-than-expected inflation for July 2016 (currently at 3.21% y/y), expected further cut in BI Rate, and the improved economy growth. The Indonesian government remains optimistic that the country’s economy will grow 5.3% (y/y) in the second half of 2016, primarily supported by rising government spending on infrastructure development.