Jakarta Stock Exchange Share Prices Second Most Expensive in Asia

Stock prices on the Jakarta Stock Exchange are the second most expensive in Asia. Bloomberg data shows that the price-to-earnings ratio (PER) on the Indonesia Stock Exchange (IDX) on July 10, 2017, was 24.73 times. This figure is only surpassed by the Shenzhen Stock Exchange's PE ratio, which stands at 35.5 times. Mumbai's stock exchange is in third place with a PE ratio of 23.68 times.

Indonesia's upgrade to investment grade by international rating agency Standard & Poor's Global on May 19th triggered optimism among investors, leading to continued stock accumulation. As a result, the Jakarta Composite Index (JCI) continued to approach the 6,000 level, reaching its highest point at 5,910.24 on July 3rd. However, in trading on July 10th, the JCI experienced a correction of 43.29 points (0.74 percent), falling to 5,771.51.

Technically, using the 14-day Relative Strength Index (RSI) indicator, the JCI remains at 50.61 on a scale of 0-100, still within the normal range. An RSI indicates overbought conditions at 70 and oversold conditions at 30. This suggests that the JCI still has the potential to rise again towards the 6,000 level, but investors need confirmation from the first-half 2017 financial reports of listed companies, which will begin to be released at the end of this month. However, the domestic stock market could continue its decline if corporate earnings fall below expectations.