Capital Market Talks KSPM FEB UNDIP

Sectoral rotation is usually caused by changes in sentiment – be it optimism or pessimism – from investors regarding the outlook for a sector in the future, usually within the next 6–12 months. If the outlook for a sector is considered to be less promising going forward, it will start to be abandoned and replaced with other sectors which are deemed to have a better outlook.

The recession will end in 2023 because it is predicted that the global economy will weaken. This prediction feels even more real with several indications that have started to occur, such as the aggressive increase in benchmark interest rates by central banks of various countries in an effort to reduce the rate of inflation.

Recently, there has been a lot of news popping up that makes us worried about the emergence of the issue of an economic recession. The President of the Republic of Indonesia, Mr. Joko Widodo and the Minister of Finance of the Republic of Indonesia, Mrs. Sri Mulyani, even conveyed this news that we must be vigilant about the phenomenon of the wave of recession that has been felt by several countries.

The increase in fuel has made many economic sectors change, lets learn how to deal with this situation

The high inflation rate in the United States makes the American Central Bank (The Fed) raise interest rates to reduce the money supply and maintain the value of the currency. The Fed began to raise its benchmark interest rate by 25 bps to the range of 0.25-0.5% in March 2022 to reduce food and energy inflation in the country. In May 2022 the interest rate was raised again by 50 bps to the range of 0.75-1%, in line with rising inflationary pressures in the US. This policy affected the Indonesian capital market where the JCI will be overshadowed by a decline due to the weakening of the rupiah exchange rate.

The rise of IHSG or commonly known as the "Index Harga Saham Gabungan" brought positive effects for Indonesia especially in the world of capital markets in Indonesia. The rise of IHSG is accompanied by the Indonesian economy which is getting better after the COVID-19 pandemic. The soaring of IHSG is thought to be the result of several sentiments that will eventually affect the behavior of traders and investors, especially in Indonesia.