Anggi M. Lubis and Tassia Sipahutar, Jakarta – Despite having broken the all-time index record this year, the country's stock market failed to maintain year-on-year growth, hauled by a falling rupiah and lackluster performance in regional economies.
The Jakarta Composite Index (JCI), the main price barometer at the Indonesian Stock Exchange (IDX), ended trade this year lower at 4,274.18 on Monday – or a 0.98 percent drop from 4,316.69 in year-end trade last year.
The year-end figure shredded the optimism shared when in 2012 the country recorded a 12.94 percent rise from the 2011 year-end index.
The bourse enjoyed a brief upbeat moment when the JCI – for the first time – reached the 5,000 psychological barrier on April 18 when it stood at 5,012.64. It continued its upward trend and hit a record high of 5,214.98 on May 20.
The index, however, slumped below 4,000 for the first time since July last year as it concluded trade at 3,967.84 on Aug. 27 – also marking the lowest point recorded by the bourse this year.
Financial Services Authority (OJK) commissioner for capital market supervision Nurhaida said conditions in both the domestic and regional economy took a toll on the country's bourse.
"All Southeast Asian countries but the Philippines and Malaysia scored plunging indices on their year-to-date trade – which affected the IDX as well," she said.
While other countries in the region recorded 1 to 7 percent index plunges, the Philippines booked a 0.49 percent increase in its year-to-date stock trade while Malaysia saw a 11.13 percent increase.
By the end of December, the year-to-date net sell amount on the IDX had reached Rp 20.6 trillion (US$1.68 billion), whereas at the beginning of 2013, the IDX still recorded around Rp 1.25 trillion in net buys.
Analysts said that in addition to fears over the US Federal Reserve's plan to scale down its stimulus package, foreign investors had sold their Indonesian stocks out of worry over the economy – further affecting the emerging economies.
The rupiah, which traded at around 9,600 per US dollar earlier in the year, plunged by more than 24 percent to its lowest level in five years at 12,239 on Dec. 19, making it Asia's worst performing currency.
IDX president director Ito Warsito added that the high deficit the country experienced this year had also made investors speculate over whether it was the right time to invest in the bourse.
Indonesia has also seen its current account plunge, with its second-quarter deficit reaching a record high of $9.8 billion, representing 4.4 percent of its gross domestic product (GDP). Indonesia's trade balance has also been in deficit in seven out of 10 months this year.
Despite recording a negative market trend, the IDX said about 30 firms went public this year, boosting market capitalization by 0.87 percent to Rp 4.16 trillion compared to Rp 4.13 trillion last year when 24 companies entered the bourse.
Among companies that listed their stocks on the IDX this year included investment holding company PT Saratoga Investama Sedaya, event organizer PT Dyandra Media International and jamu (herbal medicine) producer PT Sido Muncul.
Kompas Gramedia-affiliated Dyandra and Sido Muncul made promising debuts with prices rising 20 percent higher than the offering price of Rp 350 and 13.79 percent from an initial public offering (IPO) price of Rp 580, respectively. Dyandra listed its shares on March 25 while Sido Muncul – the first jamu maker to be listed on the bourse – became the last firm to enter the stock market on Dec. 18.
Saratoga shares, founded by local tycoons Edwin Soeryadjaya and Sandiaga Uno, on the other hand, plunged 13.18 percent to 4,775 from its IPO rate of 5,500 during the first trading session on June 25.
Ito said the IDX had targeted another 30 companies to enter the stock market next year, adding that he was optimistic that the bourse would book positive growth in 2014 despite it being an election year. "But stock trade will likely face currency depreciation, just as this year," he said.
Companies to be listed on the stock market early next year will include Blitzmegaplex cinema operator PT Graha Layar Prima, tower company PT Bali Towerindo Sentra, media firm PT Intermedia Capital and transportation company PT Eka Sari Lorena.
Trust Securities research head Reza Priyambada said that macroeconomic improvements were expected to boost the JCI next year as the country hopes to see lower inflation and a current account deficit, as well as a more stable rupiah.
Pemeringkat Efek Indonesia (Pefindo) analyst Achmad Sudjatmiko said that the JCI stood a chance of breaking the 5,000 psychological barrier again next year, supported by past data.
According to Achmad, election years proved to be positive for the capital market as the JCI posted growth throughout 2004 and 2009 when Indonesia also held elections.
However, he acknowledged that the Fed's tapering off plan would continue to cast a shadow on foreign investors' movement.