Foreigners revisit Indonesia stocks on easing economic concerns
The country's equity market posted US$83.8 million in net foreign inflows as at May 15 after seven straight months of outflows. That comes as the Jakarta Composite Index (JCI) nears a bull market, having recovered by roughly 18 per cent from a low in early April after the US paused reciprocal tariffs.
The flows indicate appetite for the nation's shares is returning after worries about slowing economic growth, the new government's fiscal policy and global trade tensions hurt confidence towards local stocks over the past few months.
'Technical trading signals suggest positive momentum in the short to medium term for the JCI,' said Shier Lee Lim, lead FX and macro strategist at Convera Singapore.
Heightened investor interest in bank stocks within South-east Asian markets is also helping the index, she added.
Financials make up about 34 per cent of the benchmark, according to data compiled by Bloomberg.
Still, further gains could be at risk as the gauge's current rally is not supported by strong economic fundamentals, according to a note by Rully Arya Wisnubroto, an analyst at PT Mirae Asset Sekuritas Indonesia. The country's economy in the first quarter grew at the slowest pace in more than three years. BLOOMBERG
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