Stock Market in Focus; Indonesian Stocks Record a Good Performance in 2022, What About 2023?
While the benchmark stock indices in the United States, China and Japan all showed steep declines in 2022, Indonesia’s benchmark stock index (IDX Composite or IHSG) managed to rise 4.09 percent to 6,850.62 points last year.
This is a solid performance – and a sign of foreign confidence in the fundamentals of Indonesia – amid the uncertain global environment, particularly if we consider that the rupiah weakened over 10 percent against the US dollar over the same 12 months. For foreign investors a depreciating rupiah increases the risk of foreign exchange losses. And so, it is remarkable that data from the Indonesia Stock Exchange (IDX) show that foreign investors bought IDR 60.57 trillion (approx. USD $4 billion) more worth of Indonesian stocks than they sold in full 2022, with the total foreign trading value in 2022 recorded at IDR 1,182.1 trillion (approx. USD $76.3 billion).
Meanwhile, domestic investors traded a total of IDR 2,435.80 trillion (approx. USD $157.15 billion) on the IDX in 2022, implying that foreign investors accounted for 33 percent of total trading last year. This means that domestic investors dominated the performance of the IDX Composite (this wasn’t always the case in history).
If we take a look at the top gainers on the IDX in 2022, then we see that companies active in coal mining and banking experienced a particularly strong year. Amid the energy crisis, coal has been in high demand (reflected in strong global coal prices), while Indonesia’s banking sector rebounded thanks to strong loan growth.
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