Jakarta, Indonesia Sentinel — The Jakarta Composite Index (IHSG) surged by 3.77% over the week, closing at 7,382.785. During December 2–6, 2024, the average daily trading frequency rose by 8.66%, reaching 1.24 million transactions compared to 1.14 million the previous week. The recent rally aligns with the “Santa Claus Rally” phenomenon.
Market capitalization saw a 5.60% increase to IDR 12,673 trillion from IDR 12,000 trillion. Despite these gains, the average daily transaction value dropped by 20.30% to IDR 10.72 trillion, and the average daily trading volume decreased by 30.19% to 18.22 billion shares.
Foreign Investor Trends
Foreign investors recorded a net selling value of IDR 170.35 billion for the week but maintained a net buying value of IDR 22.63 trillion year-to-date. The overall market performance, combined with seasonal trends, has bolstered investor optimism as the year-end approaches.
Santa Claus Rally and Its Implications
The recent rally aligns with the “Santa Claus Rally,” a market phenomenon where stock prices increase during the last week of December and the first two trading days of January. This trend is often linked to factors such as tax considerations, holiday bonuses, and general optimism.
Investors typically capitalize on this rally by buying shares at year-end, leveraging the anticipated “January Effect,” which sees stock prices rising as the new year begins.
Market Optimism Driving the Rally
Bullish investor sentiment is a driving force behind the Santa Claus Rally. Confidence in the market and expectations of strong returns encourage buying activity. Additionally, lighter trading volumes during the holidays provide an opportunity for bullish investors to influence market movement.
Other contributing factors include holiday spending, seasonal bonuses, and a shift in focus as some investors opt to spend time with family, leaving retail investors to take advantage of lower activity.
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A Positive Signal for 2025
Historically, the Santa Claus Rally is seen as a good omen for the coming year. Investors remain hopeful that the current momentum will carry over into 2025, supported by robust market performance and renewed optimism for economic growth.
(Becky)
