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View all search resultsMarket sees promising outlook for next year
With national politics among the key factors to growth, the Indonesian market can expect a brighter outlook next year, according to an investment management firm
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W
ith national politics among the key factors to growth, the Indonesian market can expect a brighter outlook next year, according to an investment management firm.
First State Investments Indonesia head of equity Hazrina R. Dewi said the country's recently improved political situation had created a conducive investment climate that had attracted global investors to pour more money into Indonesia.
Hazrina said the recent news of a Russian company planning to invest up to US$500 million in building a smelter in Indonesia reflected positive sentiment among investors.
A Russian government official said last month that Vi Holding, a leading industrial group in Russia, planned to build a ferronickel smelter here.
According to Hazrina, the bourse would enjoy the advantage of the presence of new investors, especially if they partnered with publicly listed companies here.
'The local companies may see an increase in production, which in turn may generate more profit because of bigger margins,' she explained.
According to Hazrina, infrastructure-related firms are predicted to contribute positively to the stock market until the end of this year, while stocks of state-owned gas firm PT Perusahaan Gas Negara and state-owned telecommunication company PT Telekomunikasi Indonesia (Telkom) are among the biggest gainers.
On Friday, the Jakarta Composite Index (JCI) closed with a slight increase of 0.02 percent to 5,049.49 from the previous close at 5,048.67.
Hazrina said the recent growth of the domestic stock market had been prompted partly by improved conditions in the House of Representatives, after the political coalition associated with Prabowo Subianto softened its opposition to President Joko 'Jokowi' Widodo's administration.
'This could be the time for investors to increase their investment as well as diversify funds,' she said.
- Better political situation has improved investment climate, says expert
- Local companies set to benefit from partnership with new investors
- While abroad, Jokowi promotes Indonesia to potential investors
Indonesia was in 34th place in the World Economic Forum's global competitiveness index this year.
The index measures the ease of doing business, with bureaucratic red tape and infrastructure woes being the lagging factors.
Late last month, Jokowi said he planned to streamline all licensing procedures so that they fell under the authority of the Investment Coordinating Board (BKPM). The system is expected to be in place in the next three to six months.
'We want to build a one-stop service for national licensing, so investors do not have to go to ministry one, two, three and then the BKPM. One place is enough,' Jokowi said.
With Indonesia's economy slowing to its lowest level in four years in the second quarter, and the export outlook remaining bleak with weak global demand, investment - which makes up 30 percent of Indonesia's economy ' is one component of gross domestic product (GDP) that could be strengthened to attain higher growth.
According to the BKPM, total foreign and domestic direct investments in the third quarter of this year reached Rp 119.9 trillion and Rp 115.2 trillion in the second quarter.
In the past few weeks, Jokowi has focused on the country's investment during a series of international meetings. In his international debut during the annual APEC Summit in Beijing early this week, the President encouraged top executives in a business forum in China to invest in Indonesia and promised a wide range of opportunities for investment from seaports to power plants.
In Myanmar, where he attended the ASEAN Summit and the East Asia Summit, Jokowi spoke with regional leaders on bilateral investment partnerships, before attending the G20 Summit.
