REPUBLIKA.CO.ID, JAKARTA -- Social media is now awash with calls for boycotts of Israel-related products. The boycott was amplified regarding the genocide or massacres committed by Israel against Palestinians.
The boycott also a solidarity step taken by people around the world, including Indonesia. In response, the Ministry of Industry (Kemenperin) assessed that the boycott action is a good momentum for the country. “That would be a good moment to strengthen the tightening of the flow of imported goods, especially imports of some products,” said Director General of Agro Industry of the Ministry of Industry Putu Juli Ardika when asked by Republika on Tuesday (31/10/2023).
He also hopes that people can make better use of local products. “For those in the country, our own products can still be fully utilized by society,” he said.
Previously, the hashtag #BDSMovement appeared on social media which was a movement to boycott, divest, and sanction Israel. The effort led users of the account to refer to brands with ties to Israel and call for a boycott.
Quoted from VOX, BDS is a global non-violent protest movement. They seek to use economic and cultural boycotts against Israel, financial divestment from the state, and government sanctions to pressure the Israeli government into complying with international law and ending its controversial policies towards the Palestinians.
In a number of countries, the boycott calls have even impacted some prominent brands such as Starbucks, McDonald's and Coca-Cola. The share prices of those companies briefly fell a few days ago.
In the past six months, McDonald's shares have had a correction of 12.58 percent. The deepest decline occurred in the second week of October 2023 coinciding with the start of Israeli incursions into Palestine. McDonald's was targeted after the franchise branch in Israel offered free meals to the military.
The same move was experienced by Coca-Cola shares, which were trimmed 12.67 percent. Starbucks shares fell even deeper by 18.69 percent. How, then, will this boycott call impact on issuers in the domestic stock market?
Kanaka Hita Solvera analyst Andhika Cipta Labora said the boycott call had little impact on the performance of domestic issuers. “The impact is small, nor does it directly cause a reduction in visits in tenants,” Andhika told Republika on Tuesday (31/10/2023).
Senada, research analyst at Infovesta Kapital Advisory Arjun Ajwani, said the boycott's impact on the domestic stock market was also minimal. According to Arjun, the Indonesian stock market is still affected by high interest rate factors.
Bank Indonesia (BI) raised its benchmark interest rate unexpectedly to six percent. “It created turmoil in the market so the next few days stocks were depressed,” Arjun said.
In addition, soaring yields on US government bonds pushed 10-year Treasury securities (SBN) up. This is due to sentiment from the US central bank the Federal Reserve has been judged too hawkish by the market.
According to Arjun, the rise in bond yields in the US that briefly broke through the five percent level and the depressed rupiah exchange rate headed towards Rp 16,000 could push BI to raise interest rates again further. This is projected to again hurt the performance of the domestic stock market.
In Tuesday trading, the Composite Stock Price Index (IHSG) closed a modest 0.24 percent higher. IHSG managed to jump into the green zone late in the second session after briefly plummeting to the 6,600s range.
Associate Director of Research and Investment Pilarmas Investindo Sekuritas, Maximilianus Nico Demus, said the weakness of IHSG was one of the depressed factors of concern about the impact of conflicts in the Middle East. “Global investors seem to be waiting and seeing. Domestically, IHSG's movements are also still volatile,” Nico said.