Flood of positive sentiment, sign that the January effect is getting stronger

Bisnis.com, JAKARTA – The positive sentiments accompanying the capital market are considered to be perpetuating the phenomenon of the January effect earlier this year. At least you can see it in the performance. Composite Stock Price Index (JCI) in the first session of 2021.

January effect It is an annual phenomenon that occurs in the capital market, in which share prices registered a positive behavior in the first month.

However, unlike the December showcase phenomenon, which has not been absent for the last 10 years, the January effect has not always occurred.

According to Bisnis records, over the past 10 years, JCI failed to achieve a positive performance at least three times at the beginning of the month, namely January 2011 (-7.95 percent), January 2017 (-0 , 05 percent) and January 2020 (-5.71 percent). percent).

In that 10-year period, the highest monthly performance for JCI in January occurred in 2018, which strengthened by 3.93 percent, while the lowest strengthening occurred in 2019, which only increased by 1 percent.

So, will the January effect happen this year?

In reference to this first operation in January 2021, the signal January effect feels strong. At the market close on Monday (1/4/2021), IHSG was observed to be parked at the 6104.89 level after strengthening by 2.10 percent compared to the position at the end of 2020 at the 5979.07 level.

On the first trading day of this year, the market capitalization reached 7146.02 trillion IDR. Additionally, total transactions were recorded at IDR 14.52 trillion with net purchases (Net purchase) foreign investors 343.32 billion IDR in all markets.

Praus Capital’s head of research Alfred Nainggolan said the likelihood that JCI would be able to print green monthly report cards by the end of January was quite high. The reason is that he felt that feelings earlier this year tended to be positive.

The first sentiment, Alfred said, is the trend in prices for most commodities that will remain quite high in early 2021, from coal to palm oil or crude palm oil (CPO).

So the second feeling gets stronger rupee that in the first trading session of this year managed to break the psychological level of 14,000 IDR.

The rupee was seen to strengthen 155 points or 1.1 percent to 13,895 rupees per US dollar. While, at the same time, the US dollar index corrected 0.36 percent to 89.612.

“In January, the market is still confident all the law, Recovery global economy, low interest rates. So with the rupee condition that was below 14,000 at the beginning of the year, we see that the market optimism is getting stronger until today, “Alfred explained when contacted. Deal, Monday (1/4/2021)

Additionally, the third sentiment came from net purchases by foreign investors in today’s trading. Alfred said the attitude of foreign investors was a sentiment in itself because throughout 2020 foreigners fled with a value of 47 trillion IDR.

Therefore, the presence of foreign investors is characterized by Net purchase encourage the optimism of domestic investors. Alfred assessed that last year, the index was able to withstand strong capital outflows. Therefore, a combination of retail investor militancy and foreign net buying will make a positive move at JCI.

On the other hand, from a technical point of view, Alfred assessed that there is still a lot of room for the composite index to strengthen to around the 6200 level, considering that at the close of 2020 the parking index will be below the 6000 level. According to him , JCI could increase by 2-4 percent for all of January.

“We see that JCI at the beginning of the year started from [level di bawah 6000 sementara di Desember pernah menyentuh level 6200. Jadi sebenernya ada ruang penguatan secara teknikal untuk bisa bermain di 6200,” jelas Alfred.