The influx of foreign funds into Indonesia's stock and bond markets is due to improving domestic economic fundamentals and the strong performance of large-cap companies. According to Nicodemus Anggi of Research and Consulting Infovesta Utama, foreign investment in the stock market is supported by the improving fundamental performance of large-cap companies that are popular with foreign investors. Meanwhile, foreign investment in bonds or state debt is due to Indonesia's strong domestic economic fundamentals and the still-attractive real yield compared to other regional real yields.
The interest of foreign investors in Indonesia's bond market is driven by expectations of the peak of the FFR interest rate and the already peaked interest rate of Bank Indonesia. This condition is expected to further improve in the second half of 2023, with estimates that the global and domestic economies will be more stable compared to the first half of 2023, where the rupiah is also projected to move in a stable trend, tending to strengthen. The three largest stocks that are magnets for foreign investors are BBRI, BBCA, and TLKM, while the bonds that are magnets for foreign investors are the FR0095 and FF0096 benchmark series with a tenor of 5 years and 10 years.
