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Investing.com -- The Jakarta Composite Index (JCI) advanced 6% month-over-month in May, defying the typical market trend of selling in May. This increase in the index was driven by a shift in foreign investment behavior.
After experiencing a net selling of $3.1 billion in the first four months of 2025, foreign investors turned net buyers of Indonesian equities, purchasing $337 million worth of stocks. This activity increased foreign ownership by 30 basis points to 47.1% in May.
Financial sector stocks continued to attract inflows from both domestic and foreign funds, while sectors such as Energy, Industrials, Healthcare, and Staples saw outflows. Domestic investors showed interest in Real Estate and Discretionary sectors, while foreign investors focused on Materials and Communication services.
In terms of individual stocks, both foreign and domestic investors seemed to be positioning for a recovery in consumption by adding to their holdings in UNVR, MAPI, BBRI, and BTPS. Conversely, they reduced their positions in Commodities, Infrastructure, and select Consumer stocks.
Foreign investors increased their holdings in 19 out of the 49 stocks tracked, with ANTM leading the additions due to a 0.5% rise in gold prices. Other notable increases were seen in banks like BBRI, BBCA, and BRIS, as well as in telecommunications and consumer sectors. The largest reductions were in MAPA, BBNI, and SMGR.
Domestic investors added positions in 20 out of 49 stocks, with BBTN topping the list, followed by retailers MAPA and ACES. Other additions included INCO, MAPI, CTRA, and INTP. However, domestic investors significantly sold off ANTM, JSMR, and GOTO.
Investor sentiment improved due to the strengthening of the Indonesian Rupiah, reduced political noise, and a better understanding of the Danantara initiative. Discussions with investors suggest an uptick in consumption and more constructive structural reforms.
The government plans to introduce fiscal incentives on June 5 to address sluggish macroeconomic conditions and rising layoffs, aiming to maintain purchasing power and economic stability to keep GDP growth near 5% in the second quarter of 2025.
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