"The record performance has been predicted by financial analysts and market players," Hendri Setiadi said in a statement here on Wednesday.
Last week, market capitalization shot up to an all time record at Rp5,639 trillion, exceeding a previous record of Rp5,565 trillion on April 7, 2016.
"Foreign investors have brought funds to the emerging market of Indonesian pushing it ahead of neighboring countries including Singapore, Malaysia, and Thailand," Hendri said.
He said the Indonesian Stock Exchange is open to accommodate and mobilize funds expected to be repatriated into the country as a result of the tax amnesty policy.
"The Indonesia Stock Market (BEI) would be ready to be the vanguard in accommodating the repatriated funds. The stock market could use various investment instruments to absorb the funds such as shares, mutual fund, asset securitization and real estate investment fund," he said.
In addition, the growing inflows of funds into the country would strengthen rupiah that could lead to falling Bank Indonesia's benchmark interest rate resulting in brisker trade in stock market.
Meanwhile, the Indonesian Stock Exchange (BEI) said the market also reacted positively to the cabinet reshuffle on Wednesday.
President Joko Widodo reshuffled his cabinet on Wednesday bringing eight new faces to his cabinet.
The rise in BEI index on Wednesday reflected positive reaction of the market players to the reshuffle, BEI's director for corporation evaluation Samsul Hidayat said.
Samsul said he was optimistic the reshuffle would stimulate realization of the government's series of policies that would jack up the BEI index higher.
The government has issued a series of economic policy packages marked with deregulation and simplification of licensing procedure.
In addition to the reshuffle sentiment, the tax amnesty sentiment would contribute to driving the BEI index at a faster rate, Samsul said.
The cash strapped government hopes to earn handsomely from the tax amnesty policy to finance its ambitious projects especially in infrastructure.
The government said many rich Indonesians have parked thousands of trillions rupiah abroad to evade tax.
At least Rp4,000 trillion of the fund are expected to be declared and Rp1,000 trillion of which would be repatriated and invested in the country. (WDY)