REPUBLIKA.CO.ID, JAKARTA -- The Indonesian Stock Exchange (BEI) said the fluctuation of the BEI index (IHSG) until the end of the year, will still be dependent on a number of domestic sentiment including the government spending.

Currently the IHSG hovers around 4,600 points, and "we are optimistic it would scale up while waiting for announcement of data about government spending, benchmark interest rare of Bank Indonesia (BI rate) and financial performance of publicly listed companies, BEI chief executive Tito Sulistio said here.

Tito said the government spending is expected to exceed 80-85 percent in 2015. Currently government spending is one of the most important drivers of the country's economic growth.

Government spending is important to give multiple effects on the economy, he said.

"I still believe in the government's commitment and in ability to accelerate the economic growth with proper targets," Tito said on Friday.

He said Bank Indonesia could cut the BI rate to a level with gap not too wide with the country's inflation.

He said the country's inflation this year is expected to be around 4 percent and the BI rate is 7.5 percent giving the central bank room to reduce its interest rater.

Theoretically, that a cut in the BI rate would have positive impact on the investment sector, he said, adding, the gain would be higher from investment than from putting the money in banks as deposits or in bonds.

"Currently the difference between BI rate and inflation is around 3.5 percentage points . In a number of other countries like the United States, Japan, and Taiwan it is negative . Why in Indonesia the difference is that wide? Hopefully Bank Indonesia would cut the BI rate," he said.

He said, however, the central bank has full authority in deciding policy in interest rate.

"No one is allowed to intervene . We could only hope that the different is not too wide between inflation and BI rates," he said.

He said around 70 percent of the companies listed on the BEI had positive performance in the third quarter of this year, and the performance is expected to improve until the end of this year.

"Therefore, if the targets for government spending and the difference in the BI rate and the inflation rate is more proportional and the performance of the publicly listed economies improved, the BEI index would scale up in the first quarter of 2016," he said.

Chief researcher of the Universal Broker Indonesia Satrio Utomo said the return of foreign investors to the domestic market had helped keep the BEI index in positive area.

Foreign investors left a significantly big foreign net buy at Rp349.45 billion on Thursday, Satrio said.

Window dressing expected toward the end of this year is also expected to help prop up the BEI index, he added.

He said amid the prevailing condition investors would be encouraged to buy more shares especially those of banks, property and consumer companies.

Analyst at the Reliance Securities Lanjar Nafi said foreign investors are watching realization of the government spending and implementation of the state budget, which is estimated to reach more than 80 percent this year.

"IHSG is gaining optimistically led by the sector oif base industry," he said.

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