JCI Trading Lower on Wednesday Morning After Six-Day Rally


DECEMBER 07, 2016

Jakarta. Indonesians shares are trading lower on Wednesday (07/12) morning, as investors takes profits following a six-day rally in the market while the rupiah strengthened against the US dollar amid late tax amnesty asset repatriation.

The Jakarta Composite Index reach 5,254 at 09:50 a.m., or 0.4 percent lower from yesterday's close. Foreign investors has so far account for a third of trading volume total trade on the day, buying Rp 128 billion ($9.6 million)  more in shares than they bought.

Indo Premier Securities said in its research note on Wednesday that investors may take the opportunity today to realize gains after the market increased 3.1 percent in the past six days. Also a correction in global oil price — WTI for January delivery drop 1.7 percent and Brent 1.9 percent — provides further negative sentiments for today's trading, Indo Premier said.

Coal miners are among the main drag to market with state controlled Tambang Batubara Bukit Asam and Indo Tambangraya Megah dropping 3.3 percent and 3.1 percent respectively.

The rupiah strengthened 0.5 percent against the US dollar on Tuesday, being traded at 13,336 against the greenback compared to 13,405 on Tuesday, according to the Jakarta Inter-Bank Spot Dollar rate, compiled by Bank Indonesia.

NH Korindo Sekuritas research analyst Bima Setiaji earlier said that rupiah gained ground over the prospect of Rp 100 trillion in capital inflows by the end of this year, as part of under the tax amnesty scheme. The inflow is part of Rp 143 trillion of assets previously hidden offshore that tax amnesty participants have pledged to bring back by December.

Bima also projected domestic investors will continue to bolster the index's increase throughout this month as domestic fund managers window-dress portfolios.

Window dressing is a common strategy among fund managers to prop up fund performances by buying outperformed stocks and ditching underperforming ones from portfolios in the end of the year or quarter, to appear more attractive to their investors.