The Sarinah Tragedy failed to shake The Market

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By: Abi Nurmansyah *)

Jakarta, CIDISS – Terrorism has always been a daunting occurrence in many countries. Such threats can happen anytime and anywhere, as well as life-threatening everyone. Currently there is no place that is safe and can be said to be free from the threat of terrorism. Principle of terrorism is to spread fear among the public, including to shake the market.

Terrorist acts that occurred in the area of ​​Sarinah, Jl. M.H. Thamrin, Central Jakarta on January 14, 2016, could make market participants worry. Until the closing of the first trading session yesterday afternoon, the stock price index (JCI) slumped sharply 1.72%, to a level of 4459.32. Group of 45 leading shares which LQ45 index fell 4.17 points, or 0.53 percent to 789.13. Meanwhile, the rupiah closed Rp13.907, edged down 0.52%.

The JCI weakening caused a sell-off mass conducted by capital market investors, so that the 190 shares listed on the Indonesia Stock Exchange experienced a significant decline. The bomb incident has caused panic selling among investors. President Director of PT BEI, Tito Sulistio also admitted selling a sudden mass are the responses in a bomb blast in the Sarinah. Psychologically, these events make Indonesia’s economy looks vulnerable to a wide variety of sentiments.

The investor panic back down after seeing the government’s efforts, move quickly catch all the bombers were not responsible for it. A number of important agenda was still underway on time. Board of Governors of Bank Indonesia not be delayed, despite terror scene not far from the central bank head office

Market sentiment was positive moves aftermath of the terrorist bombings of the Sarinah. Bloomberg data at 09.30 am on Friday January 15, 2016 shows the value of the rupiah against the US dollar in early trade on the market to move higher in the position of Rp 13 894 per dollar, stronger than yesterday’s close at 13 907. While the Composite Stock Price Index (CSPI) in early trading on the move in the green zone. Stock index opened up 5.8 points to 4518.98.

Market conditions quickly recovered showed investor confidence is still high to invest in Indonesia. Market players and businesses remain confident despite the economic situation is considered less conducive security. JCI correction that happened yesterday, did not last long because of the strong fundamentals of the national economy.

However, the government also needs to improve the security system in the country to maintain investor confidence. Investors will continue to demand the government’s commitment to provide convenience facilities for investors that is not easily affected by issues related to security.

Attacks of terrorism must be confronted with activity as usual, because of public panic is expected by the terrorists. In addition, all parties should avoid polemics about it. If more are speculating it will make the situation more and more tangled. The terrorism problem can be entrusted to authorities such as police and intelligence agency. [AN]

*) Jakarta Contributor

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