Investors see RI market as 3rd most optimisti 

The Indonesian capital market has retained its position as the third most optimistic market in the Asia-Pacific region in the first quarter of this year. A survey released last week by the Dutch financial services giant ING, placed Indonesia after India and China, strengthening its position as one of the stronger capital markets in the region, amid the global economic crisis that has sent most bourses in the world into turmoil. Last year, Indonesia also ranked third after China and India.

            “The ongoing optimism is likely because investors felt that Indonesia’s economy was cushioned to an extent by high commodity prices and fuel prices correction,” ING Securities Indonesia president director Robert Scholten said in a text message.

            He added the government’s quick response to the global crisis by managing the country’s economy well had also made investors more confident in Indonesia. The survey measures and tracks investor sentiment and behavior every quarter from 13 Asia-Pacific markets, including China, Hong Kong, India, Australia and New Zealand.

            Commenting on investor confidence in the Indonesia capital market, Mandiri Asset Management head of equity Kenny Soejatman said Indonesia had become a safe haven for investors. “The political situation is relatively stable, even after the elections, and the economy is still growing, so there is no reason for investors not to invest here,” he said.

            The relatively peaceful legislative elections, coupled with early poll results that indicate the incumbent President Susilo Bambang Yudhoyono may likely be re-elected, have received positive responses from the market.

            The Jakarta Composite Index jumped 11.8 percent in the last two weeks, while the rupiah gained 7.1 percent this month, making it Asia’s best-performing currency. Despite the global crisis, the Indonesia economy is expected to keep growing by between 4 and 4.5 percent this year, relatively better than neighboring countries, where the economies may contract.

            The Finance Ministry estimates the economy grew by between 4.3 percent and 4.8 percent in the first quarter of this year. The Central Statistics Agency (BPS) will announce the official figure in May.

            However, stock market analyst Felix Sindhunata suggested a touch of caution, warning it was still not clear who would run the administration for the next five years. “We must wait at least until the presidential election in July.”

            Despite the encouraging outlook on investor confidence in the Indonesian market, the ING survey also showed the investor sentiment index for Indonesia fell to 96 in the first quarter of this year from 109 in the fourth quarter last year, as investors were taking a conservative investment approach in the face of the worsening global economy. “It’s not surprising to see Indonesian investors remain conservative in their investment approach. This is after all not the first crisis to hit Indonesia, and most investors have learned their lesson,” Scholten said.

Some of investors’ views:

* 56 percent of Indonesian investors take a balanced investment strategy and continue to look for medium- to long-term growth with stable return.

* 51 percent do not know what investment decision to take and 32 percent claim they will invest less and reserve more cash.

* 83 percent are worried about job security.