The market player’s expectation of tax amnesty program has attracted foreign funds worth 36.8 trillion IDR to Indonesia Stock Exchange (Bursa Efek Indonesia/ BEI) since the beginning of this year. Indonesia Composite Index (ICI) has strengthened by 17.56%. Some securities raised IHSG’s target until the end of this year to a level of 5.650 to 5.719 points.
Andy Ferdinand, Head of Equity Research from Samuel Sekuritas Indonesia, said IHSG had limited upside potential because the recent increase of index was not supported by the companies’ performances in the first term of 2016 which were relatively weak. Historically, IHSG is vulnerable on corrections in August. After that, IHSG is likely to strengthen back but more limited due to concerns of The Fed’s high interest rates of 25 bps.
Andy predicts tax amnesty program will be the attention for market players. If the tax revenue from tax amnesty could reach by 50%, a positive sentiment to the market is getting stronger. The public companies performances at the market in the second term are also predicted to rise over the improvement of macro conditions, stimulus, and government spending.
Meanwhile, Daewoo Securities Indonesia considers tax amnesty program would increase the liquidity in the financial market. Realization of tax amnesty will be better this time with tax amnesty program in1964-1965, tax amnesty in 1984-1985, and Sunset Policy 2008. Automatic Exchange of Information which is an interstate information exchange program will be valid in 2018 so the taxpayers who do not follow the tax amnesty will be potentially affected by severe sanctions.
Daewoo’s target of IHSG will move in the range of 4.943-5.719 points until the end of this year. The shares that were recommended by Daewoo are consumer sectors, infrastructure, varieties of industry, and basic industry that has large and liquid market capitalization. On Monday (15/8), IHSG had weakened by 1.05% to 5.320 points. (*)
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