IHSG Fails to Set New Record High, Only Up 13 Points

The Jakarta Composite Index (JCI) of the Indonesia Stock Exchange closed up only 13.18 points (0.22 percent) at 5,914.03 on Monday (October 2nd), failing to set a new record high. The JCI had touched its intraday high of 5,936.138, driven by controlled inflation and positive regional market sentiment. The current closing record high stands at 5,915.36 on August 25th.

From the end of 2016 to October 2nd, 2017, the Jakarta Stock Exchange index has risen 617.32 points (10.44 percent) and has remained above 5,900. Technically, the Jakarta Stock Exchange index still has upside potential. Based on the 14-day Relative Strength Index (RSI), the JCI remains in neutral territory at 58.64 (on a scale of 0-100), indicating potential for a new record high. For reference, an RSI of 70 indicates overbought conditions, while an RSI of 30 indicates oversold conditions.

However, from a fundamental perspective, stock prices on the Indonesia Stock Exchange are quite expensive, potentially hindering index movement. The Price-to-Earnings Ratio (PER) of the domestic market has reached 23.09 times, significantly higher than the PER of the Singapore Exchange (11.28 times), the Malaysian Exchange (16.49 times), the Hong Kong Exchange (13.72 times), and the Tokyo Exchange (18.43 times). The Jakarta Stock Exchange's PER is only lower than that of the Shenzhen Exchange, which stands at 35.26 times.