Indonesia: Foreign industry still flocking to country ‘cuz of nearly free natural resources
A year-end report from the Indonesia Central Securities Depository
(KSEI) reveals that foreign investors accounted for the largest
portion of investment in the Indonesian stock market last year, with a
67 percent share up from 66 percent in 2007. The figures show that
foreign investors have confidence in the Indonesian market as
liquidity problems in their home countries have forced them to invest
in emerging markets, KSEI president director Ananta Wiyogo said
recently.
“Maybe they sold their assets in other countries, but not
in Indonesia. We are still attractive to them,” he said. The
Indonesian stock market, whose main index and capitalization fell last
year by 49.3 percent and 45.9 percent respectively, will see the
return of investment this year on fairly low share prices and
still-attractive yields, analysts say. Foreign investors have been
able to make 15 to 20 percent in yield from investments in the stock
market, and will continue to look at Indonesia and other emerging
countries as they earn less from investments in developed countries.
Foreign investors had left the market during the October collapse, but
had now started to return and this trend is likely to continue this
year, analysts say. While still dominating the capital market
portfolio, asset value held by foreign investors declined by 45.7
percent to Rp 646 trillion (US$60.07 billion) by the end of last year,
from Rp 1,191 trillion in 2007, as impacts of the global financial
downturn impacted stock value. Local investors accounted for 33
percent of the market in 2008 with stock assets worth Rp 210.2
trillion, down from Rp 400.9 trillion in 2007. According to unofficial
reports, less than 1.5 million Indonesians have investments in the
Indonesian stock market. The Indonesia Stock Exchange (IDX) has
targeted to attract 2 million local investors last year and again this
year. Indonesia’s largest institutional investor in the local stock
market is the PT Jamsostek state pension company.
http://watimas.blogspot.com/2009/01/foreign-investors-dominate-indonesia.html
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