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Jakarta, CNBC Indonesia – The Jakarta Composite Index (JCI) closed October on a very good note. During the 10th month, JCI managed to fly up to 5.30%.
Last month, market confidence was the best, both in the domestic and international markets, so investors, especially domestic investors, flocked to enter the market.
The positive sentiment of last October was certainly none other than the endorsement of the Labor Creation Law, aka the Omnibus Law.
Yes, a branded law will bring a morning ‘cilaka’ to workers, so that a large-scale demonstration from various walks of life has brought its own blessings to investors.
With the enactment The Omnibus Law certainly generates a positive sentiment for the economy in general and the capital market in particular in the long term.
This issue because this rule will clear up the obscurity of the previous overlapping regulations and attract foreign investment in the real sector, also known as Foreign Direct Investment (FDI). this will excite the capital market.
In addition to being supported by the Omnibus Act, the IHSG rise was also aided by the decision of the Governor of DKI Jakarta, Anies Baswedan, to relax the PSBB (large-scale social restrictions) in the capital so that the wheels of the economy could spin even faster.
To be sure, last month the benchmark for Mother Earth blew up.
However, will JCI be able to continue on the positive note in November?
How about last November, this eleventh month was JCI friendly?
FYI, in fact, November on average is a pretty good month for JCI.
Over the past 20 years, JCI posted an average increase of 0.88% this month.
Even if for the last 20 years you have only invested in November, then capital gain (the benefit of the increase in the price of the shares) of his portfolio is huge at 45.54%.
Of course, this will confuse investors. Because in November it turned out that JCI recorded the most frequent corrections, that is, 11 decreases and only 9 gains.
Although JCI was corrected more frequently in November, in fact this month’s correction was only slight in the past 20 years. The biggest correction in the IHSG in November only occurred in 2013, when the JCI was corrected by 5.64%.
Meanwhile, the JCI trend that took off specifically in November has historically not been blunted. JCI recorded 13.63% in 2004 and 8.61% in 2006.
The green market share in November itself is not a new phenomenon because this month’s investors are preparing to welcome the end of the year, which usually occurs in December. santa claus rally or window dressing (a term that connotes a polishing performance before the end of the year).
These two phenomena generally occur because investment managers (IMs) try to green their portfolios by simultaneously selling losing stocks and converting them into stocks that have the potential for short-term gains.
Therefore, the action of adorning the windows by buying green stocks will impact the performance of your portfolios to make them look beautiful at the end of the year.
Amid these conditions, there is a tendency for investors to want to catch up santa claus rally also known as stock rallies in December, a month known for being investor friendly.
Generally typical swing inverter who likes the short term more fond of entering in November.
CNBC INDONESIA INVESTIGATION TEAM
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