JAKARTA. Indonesia’s achievement in obtaining IDR97 trillion of tax amnesty revenues during the first phase of the program has brought positive sentiment to Indonesia Stock Exchange (IDX).  The positive sentiment will continue to affect to IDX by the end of the third quarter of 2016.

Head of Research Department at Universal Broker Indonesia Satrio Utomo said that the government commitment to boost construction sector has driven investors to buy shares of the sector. Aside of construction, Satrio suggested investors to monitor the cement production sector, as the sector will support construction sector’s growth.

However, Satrio reminded investors to monitor the negative sentiment, which is driven by the ongoing though negotiation on the State Owned Enterprises’ privatization.

Analyst at Recapital Securities Liga Maradona said that construction and cement production sectors will be attractive for investors. In addition to the two sectors, Liga also suggested investors to monitor banking sector, since the banking sector will be the starting point for flowing tax amnesty revenues to infrastructure and cement production sectors.

“The tax amnesty revenues will generate job opportunities. Subsequently, this may have a trickle-down effect to boost consumer and retail sectors”, Liga said.

On banking sector, Liga suggested investors to monitor the trends of BBNI, BBRI, and BBCA shares. Aside of banking sector, Liga suggested investors to observe infrastructure issuers, such as JSMR and PGAS, while on cement production sector he suggested investors to monitor INTP and SMGR shares.

However, performance reports of the issuers for the third quarter of 2016 may affect to Jakarta Composite Index (JCI) in a short term. Head of Research at Bahana Securities Harry Su said that investors need to monitor the financial report of each issuer. He predicted that banking and coal sectors may have poor performance, while poultry and CPO sectors may reflect good performance. The good performance in poultry and CPO sectors was driven by the commodities price rise compared to the last year.

(Muhammad Farid/Translator)

Editor: Barratut Taqiyyah Rafie