HSBC Remains Cautious on Indonesian Stocks, Targeting IHSG at 7,500

HSBC Global Investment Research has predicted a target for the Jakarta Composite Index (JCI) of 7,500 by the end of this year. According to Chief Asia Equity Strategist at HSBC, Herald van der Linde, capital markets in developing countries are generally still on a positive trend. Though, there is still uncertainty surrounding Indonesia's position in the Morgan Stanley Capital International (MSCI Index). Herald implied that if Indonesia were to descend into a frontier market it would lead to massive selling, particularly among passive funds like ETFs, which would have to exit the country. However, this scenario is not absolutely certain as Indonesian regulators are continuing to strive to maintain Indonesia’s position in emerging markets.

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