theIndonesian – Foreign investors’ sell-off continues. Yesterday, Tuesday (7/5/2024), the Composite Stock Price Index (JCI) weakened 12.28 points or equivalent to 0.17% to 7,123.61.
Behind the decline, foreign investors’ net sell reached Rp714.39 billion. If accumulated since the beginning of the year, foreign investors are actually still net buying Rp3.31 trillion. However, this value could have been even greater if investors did not sell throughout last month.
In April, foreign net sell reached IDR20.09 trillion based on monthly data from the Indonesia Stock Exchange (IDX). This value was inversely proportional to the March 2024 period. Foreign investors made a net buy of IDR7.84 trillion during this period.
When entering the domestic bourse, foreign investors make large-cap stocks their first choice. When exiting, these stocks are also the first to be sold. This is also reflected in the stocks most hit by foreign net sell over the last 20 trading days.
– BBRI, net sell IDR10.5 trillion
– TLKM, net sell IDR3.8 trillion
– BMRI, net sell Rp2.6 trillion
– BBCA, net sell Rp1.8 trillion
– BBNI, net sell Rp1.2 trillion
– ASII, net sell Rp804.4 billion
– ISAT, net sell IDR238.2 billion
– AMMN, net sell IDR 225.1 billion
– UNTR, net sell Rp201.3 billion
– KLBF, net sell IDR 173.6 billion
Algo Research analyst Alvin Baramuli explained that the difference in attitude between domestic and foreign investors is one of the answers to why this condition occurs.
“Based on our conversations with investors, domestic institutional investors have cash and are waiting to get back into banks to fill their underweight positions,” Alvin said.
“Keep in mind, sometimes local institutional investors do not buy a stock because they believe in the fundamentals, but only to benchmark their portfolio so that returns do not deviate too far. This applies to large-cap stocks, especially big banks.”
This is in contrast to foreign institutional investors for whom fundamentals are an important factor. This is why foreign net sell is dominated by bank sector stocks. Moreover, the performance results of four major banks in the first quarter of 2024 were below consensus.
Bahana Sekuritas analysts Satria Sambijantoro and Evelyn Paramita also did not deny that the decline in asset quality of the four major banks, including BBRI, is currently a fundamental issue that is currently of concern to foreign investors.
Many factors triggered it, ranging from domestic to foreign sentiments. What is clear is that these sentiments still open up opportunities for selling pressure on the bank’s shares, at least in the short term.
If the selling pressure continues, the effect could be long. The reason is, the shares of the four major banks are widely owned by foreign investors who also recently seemed to be leaving the shares of the four.
“Their ownership is also large. So, not only suppressing the JCI, but the outflow of foreign capital can also put pressure on the balance of payments which in turn makes the rupiah weaken,” as quoted from Bahana research, Tuesday (7/5).
However, the two Bahana analysts saw that the decline in bank asset quality was only temporary. Thus, both of them are still bullish on the four bank stocks. The following are recommendations from Bahana Sekuritas.
– BBRI Buy, target price Rp6,770/share
– BMRI Buy, target price Rp7,940/share
– BBNI Buy, target price Rp5,825/share
– BBCA Buy, target price Rp11,220/share
OJK’s Concern
The departure of foreign investors has also become a concern of the Financial Services Authority (OJK). Chairman of the OJK Board of Commissioners Mahendra Siregar previously explained, the market capitalization value or JCI market cap still grew 0.15% since the beginning of the year to Rp1,169 trillion.
“However, OJK is watching the influence and uncertainty in global financial markets on the performance of the domestic capital market,” said Mahendra, Friday (3/5/2024).
“In particular, the sell-off of foreign investors since the beginning of the year until April 26 resulted in the accumulation of stock purchases by foreign investors falling so that a net buy of Rp7.62 trillion was recorded.”
Nevertheless, Mahendra assessed that the domestic stock market is still solid. This is reflected in the value of public offerings that reached Rp48.04 trillion, including from 15 new issuers.
The Indonesian
