Jakarta, CNBC Indonesia – President Director of PT Surya Timur Alam Raya Asset Management (PT STAR AM), Reita Farianti assesses that the Composite Stock Price Index next year will still grow in the range of 7,200 to 7,800.

This is in line with the control of the Covid-19 pandemic in the country which is quite conducive and investors have mitigated the risk of the impact of the Federal Reserve's financial asset reduction (tapering) policy. Reita explained that developments regarding the Omicron variant continue to be of concern to market players. When the first positive case of Omicron was announced in Indonesia by the Minister of Health, the stock market experienced pressure.

However, if accumulated since the beginning of this year, the performance of the Composite Stock Price Index (IHSG) still shows a strengthening of 10.36% with net purchases by foreign investors worth IDR 38.47 trillion. "Hopefully entering 2022, COVID-19 cases in Indonesia will remain under control and thus economic recovery can continues the momentum continues," he said, in an interview with CNBC Indonesia, Wednesday (29/12/2021).

Meanwhile regarding US Tapering, according to Reita, this risk has largely been priced in by the market, meaning that the market has estimated that it will respond to the inflation rate in the US which has risen quite high. At last week's meeting, the Fed announced that it would accelerate the process of reducing financial stimulus and raise interest rates 3x in 2022 and 3 more times in 2023. Currently the market consensus seems to be quite in line with the Fed's steps. "The market sees that the potential for 3 Fed interest rate increases in 2022 and 3 times in 2023 is still more gradual or less aggressive compared to the cycle of interest rate increases between 2004 and 2006," said the former President Director of BNI Asset Management.

For JCI projections, in 2022, STAR AM projects, IHSG can grow to a level of around 7200 – 7800. "Of course, assuming that the COVID numbers in Indonesia are quite under control and there are no longer strict mobility restriction policies," he explained.

GoTo's IPO Becomes a Catalyst

Some of the sectors chosen by STAR AM next year are the banking sector, both conventional and digital banking. Apart from that, banking is the largest sector in the IHSG whose growth prospects are also very attractive. "Investors need to really carry out in-depth studies and choose quality shares, meaning those that have good fundamentals and are supported by sustainable growth potential," he said.

For example, said Reita, in the case of digital banks, investors must really understand the business model, which ones can really achieve the path to profitability convincingly, and which ones cannot. "Currently, most digital banks are still making losses, but can their strategy and business model achieve sustainable profitability in the not too distant future? "That is what needs to be studied more deeply," he added.

Apart from that, GoTo's IPO is still eagerly awaited by investors. "We are positive about the potential of Indonesia's new economy sector in the future, because this sector will be the main motor of Indonesia's economic growth," stressed Reita.

Source: https://www.cnbcindonesia.com/