JP/Irma
There was a different ambiance on Wednesday, the last day of trading at the Indonesia Stock Exchange in 2009, from a year earlier, which summed up the contrasting moods arising from IDX experiences during the two years.
No dancing and golden flags appeared on the last day of trading in 2008, as the stock market index had hit rock bottom and was reeling from the impacts of the shattering regional market crash in October.
On Wednesday a year later however, the atmosphere has changed dramatically. And for good reasons.
Right after Finance Minister Sri Mulyani Indrawati pushed the button signaling an end of this year’s trading, dancers in red costumes entered the trading floor with golden flags and golden fans,
while the audience greeted them with a big round of applause reflecting successes beyond all expectations in 2009.
The Indonesian Stock Exchange (IDX) closed at 2534.36, the highest point this year, with the Composite Index rising by 87 percent during this year, making the IDX the world’s second best performers.
With such good figures on the board, the expectations are high for more good results in 2010.
IDX is expected to be among the stock exchanges that will enjoy robust growth in the world next year due to its location in a country with solid economic growth.
“Investors have considered Indonesia as one of the most attractive markets in the world, so they will choose to invest here rather than in other places,” said Edwin Sinaga, the president director of local securities company PT Financorpindo Nusa.
Indonesia will again be among the relatively few economies in the world expected to post positive growth next year, even higher than this year’s estimated growth of 4.3 percent, at a time when
many economies are still suffering from recession.
Therefore, Edwin said, next year would be a good opportunity for IDX to continue its strong growth as the global market would be in excess liquidity on the back of global economy recovery.
He believes that the index may reach above 3,000 next year as more foreign investors will enter
the market.
In response to this trend, the chairman of the stock market regulator, Fuad. A. Rahmany, said that the authority had prepared a new regulation to accommodate an expected rising demand for local shares.
A good year: Traders monitor computer screens displaying the movement of stock market index at a securities company office in Jakarta. The Jakarta Composite Index climbed 87 percent throughout the year, making it the world’s second best performer after Shenzhen. JP/J. Adiguna
“We need more shares to circulate in the market to meet these new demands, that’s why we will issue new regulations that will attract potential big companies to enter the market,” he said.
Among the proposed regulations is a 5-percent tax cut concession for companies that offer more than 40 percent of their stake to the public.
According to data from Bapepam, there were only 12 companies listing their shares in the IDX this year, less than the 17 firms that went public in 2008.
IDX president director Ito Warsito has said however that the stock market authority now targets that 25 companies will go public next year, including big firms like state flagship airline Garuda Indonesia and steel producer Krakatau Steel.
Another target for the IDX authority for next year is the development of under-developed derivative markets. These transactions were only valued at Rp 22.92 billion (US$2.42 million) in 2009, which was very low compared to the value of overall share transactions that could reach up to Rp 973 trillion.
IDX data shows that the most active shares in 2009 were mostly those owned by mining companies and banks.
The trend for mining and commodity-based shares will likely to continue next year, Trimegah president director Aviyasa Dwipayana told The Jakarta Post, predicting an expected rise in commodity prices next year on the back of increasing demand in line with the recovery of the global economy.
However, Mulyani warned industry players and investors not to become too euphoric in these favorable conditions. “There are things that we need to anticipate and beware of, especially on policy changes,” she said.
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