Tag Archive | "IDX"

The $ 672 billion roars !

Indonesian stocks are traded by Japanese investors every day, but one recent request from Tokyo was out of the ordinary. A big investor phoned up a local fund manager asking to buy $1bn in equities on the Jakarta stock exchange within just 20 days.

Jakarta is not liquid enough to handle that kind of money. But the anecdote shows the scale of interest that has made it one the world’s best performing stock markets this year.

According to EPFR, a research firm that tracks fund flows, net inflows into equities in the first half of 2010 were $971m. At that rate, net inflows are on track to top last year’s $1.1bn. Much of that came from Japan, which recently upgraded Indonesian government debt to investment grade and is the largest foreign, long-term investor in the nation. With sturdy economic growth, stable politics, low inflation and a consumer market of 240m people, there is an unusual absence of bears questioning Indonesia’s prospects. It seems Asia’s sleeping $672 bn tiger has finally awoken.

“You’ve got a scenario of very sustainable 5.5 per cent to 6 per cent growth, historically low inflation prevailing for some time, a stable currency and bond yields falling to record lows,” says Tim Condon, chief economist for ING Asia. “This is a very attractive climate for investors.”

Indonesian equities are now valued at an average multiple of 17.5 times the consensus of forecast earnings this year and 15 times 2011 profits. That compares with an average multiple for the emerging markets universe of 11.9 times 2010 earnings and 9.9 times next year’s profits. The Jakarta composite index rose 86 per cent in 2009 and is up 19.4 per cent this year. It was a safe haven when most economies slipped into recession, largely because two-thirds of gross domestic product is generated by domestic consumption.

Morgan Stanley warns that the country’s stock market is over-priced compared with India and China or south-east Asian peers. Others analysts say Indonesia is too poor and has too small a middle class to be ranked investment grade.

But Mr Condon says: “In a world of considerable uncertainty, countries that are able to show resilience and some insulation from that uncertainty, like Indonesia has shown, will remain standouts … that will continue into the second half.”

Foreign buying of bonds has driven down the yield on the 10-year government issue to slightly more than 8 per cent this year. EPFR says net inflows into the country’s bond markets have been $2.1bn this year, making Indonesia second only to Mexico among emerging markets in attracting bond investors. Investors are optimistic about the rupiah and sound monetary policies under the first directly elected leader, President Susilo Banbang Yudhoyono. The economic outlook is also robust. Interest rates are expected to remain steady, although a surprise spike in July inflation above 6 per cent could prompt a sooner-than-planned rate hike.

Ito Warsito, president director of Jakarta’s stock exchange, says market capitalisation has more than doubled since the end of 2008 to more than $250bn. His goal is to take public 75 companies and boost the market capitalisation to $300bn by the end of 2012.

“My main focus is market capitalisation,” Mr Warsito says. “The current appreciation of our index and prices also creates a burden, but it is a nice problem for us.”

Investors are looking to buy shares in the natural resources, banks, infrastructure and consumer goods industries. Upcoming IPOs will include miner PT Berau Coal, telecommunications company Tower Bersama Group, Krakatau Steel and the national airline, Garuda.

[via Financial Times]

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Asia’s Best Performing Market

The Jakarta Composite Index’s 67 percent gain this year makes the Indonesia Stock Exchange, which is celebrating its 32nd anniversary this week, the third best-performing bourse in Asia, the capital market watchdog said on Wednesday. Two Chinese bourses, the Shenzhen and Shanghai markets, ranked first and second with gains of 93 percent and 74 percent, respectively, according to Bloomberg.

The Taiwanese and Philippine markets ranked fourth and fifth in the region this year, gaining 47 percent and 45 percent, respectively. Indonesia’s IDX capitalization increased from $115.4 billion on Jan. 5 to $188 billion on Aug. 11.

The gains in the index and the increased market capitalization underscored the revival of investor confidence since last year’s crash. While stock transactions totaled  $60 billion from Jan. 5 to Aug. 11, with $ 390 million in average daily transactions.  Daily transactions so far this month have reached $700 million, which is a very attractive level of trading.

The average daily trading frequency rose 44 percent to 85,000 daily transactions this year, while average trading volume rose 94 percent to 3.3 billion shares. The increase in trading volume and frequency was supported by the increase in the number of retail investors who traded stocks online.

Foreign investors still dominated the market, holding 66 percent of the capital value, up from 64 percent last year. While local investors dominated trading of corporate and Islamic bonds, accounting for 97 percent of the total of 78 trillion transactions, up from 76 percent in 2008.

The IDX has been targeting to have at least two million investors by 2012. China is said to have recently attracted two million new investors in just one month.

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Sexiest Stock Market

I do not really know about stock market, stock exchange, or financial market, or whatever. All I know is that I don’t see CNBC and Bloomberg channels because they have too much numbers on their screen. If you are not a trader, nor a broker, to see the size of a country’s stock market is easy. Just see the market value!

Now, compare Indonesia Stock Exchange (IDX), Singapore Stock Exchange (STI), Kuala Lumpur Stock Exchange (KLSE), and PSE (Philippines Stock Exchange). See the market value only, and you’ll find something different about IDX market value.

Yes, IDX has rallied significantly from January – June 2009 of more than 50%. Earlier this year, its market value was only 1,335.41, now it’s already 2,093.17. It is believed, that it is only a matter of time that IDX will soon overrun STI, considering that more multinational companies are queuing up to be listed. Indonesia’s stocks are rated OVERWEIGHT (trust me, this is a very positive rate), besides China and India.

Ready for more, Indonesia?

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