Jakarta. The Indonesia Stock Exchange (IDX) had a robust week, with market capitalization soaring over 2 percent to reach an all-time high.

According to IDX data for the period of July 1-5, market capitalization surged 2.8 percent to Rp 12,431 trillion, up from Rp 12,092 trillion the previous week. The previous record was set during May 13-17, with a capitalization of Rp 12,420 trillion.

The Composite Stock Price Index (IHSG) also saw a significant rise, climbing 2.69 percent to 7,253.3 from 7,063.5 at last week’s close.

Additionally, the average daily trading frequency increased by 24.44 percent to 947,000 transactions from 761,000 transactions.

However, the average daily transaction value decreased by 34.09 percent to Rp 10.65 trillion from Rp 16.16 trillion last week. Similarly, the average daily trading volume fell by 18.79 percent to 15.55 billion shares from 19.15 billion shares.

On Friday, foreign investors recorded a net buy of Rp 558.44 billion, reducing the year-to-date net sell by foreign investors to Rp 5.09 trillion.

Pilarmas Investindo Sekuritas noted that the market is hopeful for an imminent rate cut by the Federal Reserve. According to CME FedWatch, there is a 66.5 percent chance that the Fed will begin cutting rates in September.

Pilarmas also highlighted that the IHSG was bolstered by positive domestic catalysts, including an increase in Indonesia's foreign exchange reserves in June. Bank Indonesia (BI) reported that foreign exchange reserves at the end of June 2024 were $140.2 billion, up from $139 billion at the end of May.

This increase in reserves provides a positive catalyst for the index, as the reserves are equivalent to 6.3 months of imports or 6.1 months of imports and government external debt payments, above the international adequacy standard of around 3 months of imports.

“Thus, the foreign exchange reserves support the resilience of the external sector and maintain macroeconomic and financial system stability,” Pilarmas stated in its research on Friday.