Certainty About Fuel Price Hike Positive For Composite Index

Jakarta, June 18 (Antara) - The Indonesia Stock Exchange (BEI) has welcomed positively certainty about the government`s policy to hike the prices of subsidized fuels, hoping it will have a good impact on the Indonesian Composite Index (IHSG). "The certainty about the government`s policy on fuel oils will make investors feel certain and enable stock issuers to determine their steps and accordingly, the IHSG will rebound," Samsul Hidayat, the exchange`s director of trade and membership, said here on Tuesday. He said the market will positively react to the certainty about the government`s policy. As such, fluctuations in stock prices can be predicted. "The market expects certainty. If there is no certainty the volatility will be higher. But now there has been certainty about the fuel oil policy," he said. Separately, on Tuesday, analyst Arief Fahruri of Mega Capital predicted the subsidized fuel price hike will raise the inflation rate so that its impact on the capital market will be felt. "But the impact will be temporary. The market will eventually adapt to it. In the long run, the stock exchange will positively respond to the subsidized fuel price hike," he said. Previously, BEI CEO Ito Warsito said the government`s policy to raise the prices of subsidized fuels will have a positive impact on the domestic economy and the capital market. "The policy to raise the prices of subsidized fuels must be implemented soon so it will have a positive impact on the domestic economy and capital market in the short and long terms," he said. He said huge fuel subsidy will have a negative impact on the country`s economic fundamentals. "I agree with the government`s decision to hike the prices of subsidized fuels. The policy should be taken as quickly as possible. Don`t delay it for a long time so as not to create uncertainty about investment climate in Indonesia," he said.