Jakarta. Indonesia's financial markets have reacted mutely to the biggest spate of terrorist attacks the country has seen since 2010, with many analysts considering it a mere blip amid larger concerns over global capital outflows and rupiah volatility.
The benchmark Jakarta Composite Index (JCI) only closed 0.16 percent lower on Monday (14/05) after recovering most of its 1.6 percent drop earlier in the day in response to four suicide bomb attacks within 24 hours in separate locations in Surabaya, East Java.
Local investors made up most of the trade on Monday, with foreigners selling Rp 489 billion ($35 million) more than they bought.
The government's benchmark 10-year bond yield fell to 7.0277 percent from 7.1724 percent, according to Indonesia Bond Trading Agency data. Bond yields move inversely to price.
"From time to time, when bombings occur, the JCI in not particularly affected. If there is any [effect], it's only temporary. The JCI is immune to the issue of bombings," said Kiswoyo Adi Joe, head of research at local securities company Narada Kapital Indonesia.
The latest suicide bombings, and the deadly January 2016 attack in Jalan M.H. Thamrin, Central Jakarta, only resulted in a 0.5 percent decline in the stock index on the day of the incident and a full recovery in less than a week.
Indonesia Stock Exchange (IDX) president director Tito Sulistio has meanwhile urged investors to remain calm, calling on them to instead focus on company performance and the country's economic fundamentals.
Companies in the blue-chip stock index, the LQ-45, are currently showing solid performances, with average revenues having risen 15.96 percent in the first quarter, compared with a year ago, while their net incomes increased by 11.68 percent in the first three months of this year.
Most blue-chip stocks are also traded lower than 16 times their earnings, presenting a bargain for investors, Tito said.
He said current uncertainty in the stock market is due to global factors, especially an anticipated benchmark interest rate increase in the United States, the threat of a global trade war, and higher oil prices.
"That causes foreign investors to adopt a wait-and-see approach," Tito said.
The government has also been adamant in maintaining a perception among investors that it is in control. President Joko "Jokowi" Widodo said on Monday that he had asked lawmakers to expedite new antiterrorism legislation that would grant the country's security agencies more power to prevent acts of terror.
"We expect Indonesia, as a sovereign country, to maintain its reputation of having the ability to address the challenges of radicalism and terrorism. We fully support the security forces, whether it is the police, Indonesian Military [TNI], or National Counterterrorism Agency [BNPT], to maintain security within the country," Finance Minister Sri Mulyani Indrawati said on Monday.
"We will continue to communicate [with investors] that Indonesia has economic policies in place to strengthen our foundations. We also maintain the momentum of the current strengthened economic growth through our policies to increase investments, exports and people's purchasing power; these are all proof from the government," she added.