The JCI 2021: a year-end Review
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Ending the year 2021 (12/30), the JCI closed at 6,582pt, to record an annual gain of 10.1% (2020:-5.1%, 2019: 1.7%).
The year 2021 Β , the 2nd COVID-19 pandemic year, was marked with improvement on the countryβs capital market foundation Β in terms of Β investorsβ Β both quantity and quality. As of December 29 last year, total number of investors increased by 92.7% YoY to 7.48mn investorsβ identity a siginificant increase, especially if compared to the pre-pandemic year 2017, of about 7 (seven) times higher. Additional investors has been dominated by the Millenials and the Z-Generation, made up of 88% of total, as of November last year.Β In addition, daily average trading value last year was recorded at IDR13.4tr or representing an annual increase of 45% as compared to that of in 2022 ofΒ IDR9.2tr.Β The increase in number of investors has improved the role of retail investors that made up of around 60% of total trading Β volume last year (2020:50%). Β ( Data Source: Indonesia Stock Exchange, site).
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The above descriptions is expected to provide further ground for Indonesica capital market to fuel the countryβs economic growth, despite the fact that the JCI did not fulfill the wide estimations to close at within 7,000pt in the year end. After hitting the historic and intra-day high on November 22 last year, at 6,755pt and 6,724pt respectively, the JCI fluctuated , while in October saw total daily average trading value of IDR17.02tr and to decline to IDR13.2tr in November (January β September: IDR13.1tr).
The dynamic of monetary policy in the Advanced Economies, especially that of the United States of America (US) plays its influence to the domestic financial market, we reckon. Β Mainly, during the last quarter last year, the US economy released strong annual gain of macro data, although sometimes on below-than-expected estimates. Overall, the latest US economy is estimated to grow by 5.5% YoY last year an estimate by the countryβs central bank, against that of global economy of 5.9% YoY, Advanced Economies of 5.2% YoY, and that of theDeveloping Economies of 6.4% YoY (Source data: WEO). Β Β Indonesia GDP is estimated to grow by 4.2% YoY*, Β and this put the country to compete for fundsΒ that move in-line with the best optimum level of yield, within choice of regions and within choice of Β types.
At present, favours seem to side to domestic Indonesia, given the relatively Β (1) well-controlled COVID -19 spread, (2) encapsulated economy toward external volatility, (3) prudent population, among others. These should help the economy and the JCI to record further improvement, we reckon**.
* GDP estimate
For the purpose of 2021 Review write-up, 4Q21 Indonesia GDP value ofconstant price is expected to grow by 3% QoQ to make-up the urgent lockdown administered during July 3 to within end of September last year.
** General valuations
At the latest ratio of 49.2%, the Indonesia stock market currently seems to be in the Under-Value bracket range, Β based on the StockMarketCapitalization to GDP ratio method presented below, as compared to the neighbouring and other countries. This simply put Indonesia stock market poised for Β further growth, we think.