Indonesia’s IDX Composite Index continues its upward trajectory, reaching a record high of 7,726 points today. The index has climbed approximately 15% since hitting a low of 6,698 points on 19 June this year, achieving its peak of 7,726 points yesterday. It has also seen a year-to-date increase of around 6%.
Recent economic data from Indonesia underscores the resilience of the country’s economy:
- The export index rose by 6.46% in July, surpassing expectations (3.85%) and the previous reading (1.19%), marking its highest level since January 2023.
- Indonesia’s foreign exchange reserves increased by $145.40 billion in July, exceeding the previous figure of $140.20 billion, reaching their highest level since December 2024.
- GDP grew by 5.05% year-on-year in the second quarter of this year, outpacing expectations (5.00%).
- The consumer confidence index rose to 123.4 points in July, slightly above the previous reading of 123.3.
- The retail sales index grew by 2.7% year-on-year in June, surpassing the previous reading of 2.1%.
Two significant factors have contributed to the upward momentum in Indonesian stocks:
- Statements from most members of the Federal Reserve and US Federal Reserve Chairman Jerome Powell about the commencement of monetary easing, including a reduction in interest rates starting from the September meeting, along with market expectations of a 100 basis point cut in US interest rates this year.
- A shift in investments away from regional areas such as China, due to ongoing economic weakness, towards other regions in Southeast Asia, including Indonesia.
Technical indicators also suggest that the IDX Composite Index will continue its upward trend in the coming period for several reasons:
- First, the alignment and upward movement of the 20, 50, and 200-day moving averages, with the 20-day average surpassing the 50-day, and the 50-day exceeding the 200-day.
- Second, the Relative Strength Index (RSI), currently at 65 points, which reflects strong upward momentum.
- Third, the MACD indicator is showing a positive crossover, with the blue line crossing above the orange Signal Line and remaining in positive territory, providing further positive momentum to the IDX Composite Index.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
