In­done­sia bear mar­ket sends buy sig­nal to na­tion's largest fund


In­done­sia's big­gest fund man­ager is tak­ing the slump that's driven the na­tion's stocks into a bear mar­ket as the cue to start buy­ing again.

BPJS Kete­na­gak­er­jaan, which man­ages about 193 tril­lion ru­piah ($13.8 bil­lion), will en­ter the eq­ui­ties mar­ket along with other state-owned in­sti­tu­tional in­vestors, Elvyn Masassya, its pres­i­dent di­rec­tor, said in a text mes­sage on Sun­day. Shares are "rel­a­tively cheap," he said, with­out nam­ing any.

The Jakarta Com­pos­ite In­dex is trad­ing at the cheap­est lev­els in 20 months af­ter plung­ing 5.4 per­cent last week. The bench­mark gauge en­tered a bear mar­ket on Fri­day af­ter fall­ing more than 20 per­cent since the April 7 peak as cap­i­tal out­flows ac­cel­er­ated amid a weak­en­ing econ­omy, slump­ing com­mod­ity prices and the prospect of higher U.S. in­ter­est rates.

U.S. rate spec­u­la­tion and China's sur­prise de­val­u­a­tion of the yuan trig­gered a sell­off in emerg­ing mar­kets that's spread­ing to de­vel­oped na­tions. Be­sides In­done­sia, Tai­wan and Hong Kong en­tered bear mar­kets last week.

For­eign in­vestors pulled $185.4 mil­lion from In­done­sian stocks on Aug. 20, the largest daily out­flow since Dec. 24. In­done­sia's econ­omy is grow­ing at the slow­est pace in six years as Pres­i­dent Joko Wi­dodo strug­gles to de­liver on plans to re­vi­tal­ize growth.

In­done­sia's gross do­mes­tic prod­uct grew 4.67 per­cent in the sec­ond quar­ter, the weak­est since Septem­ber 2009, while cor­po­rate earn­ings dropped at 88 per­cent of com­pa­nies tracked by Bloomberg in the quar­ter ended June 30. While over­seas in­vestors have off­loaded $1.35 bil­lion of the coun­try's stocks in the past 12 months, the most af­ter Thai­land among Asian mar­kets tracked by Bloomberg, the flood of cash out of In­done­sia isn't over, said Alan Richard­son, a Hong Kong­based money man­ager at Sam­sung As­set Man­age­ment Ltd.

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