Domestic investors upbeat on investment, survey shows
Anggi M. Lubis
The Jakarta Post
Indonesian investors are increasingly optimistic despite domestic economic slowdown, according to a recent survey from global investment management firm Schroders.
Ninety percent of respondents to the survey said they would maintain or even increase their investments in the next 12 months, while around 75 percent said they would boost their investments.
The figure is a significant increase from last year, when only 71 percent of respondents said they would maintain or add to their investments.
The report further revealed that of 200 respondents, 98 percent believed that they would book profits from their investments this year, in comparison with 93 percent of other Asian respondents and 91 percent of global respondents, signifying high optimism among local investors.
Of the surveyed Indonesian respondents, 88 percent displayed a strong homebound bias, believing that Asia would offer higher returns than other investment destinations. That figure is an increase from 83 percent last year.
'The survey results show that the slowing economy has not discouraged people from investing. However, in a situation like this, investors have to be more cautious in making their investments,' said Michael Tjoajadi, CEO of Schroders Indonesia, the nation's biggest fund manager.
The findings are part of Schroders' 2015 Global Investment Trend Survey, which involved 20,706 investors across 28 countries planning to invest more than 10,000 euros over the next 12 months, including around 200 based in Indonesia.
The findings were surprising given they were announced amid slowdown in the country's economy, which grew by only 4.6 percent in the first quarter, the lowest level witnessed since the start of the global financial crisis in 2009.
Most economists have revised down their outlook for the Indonesian economy, with most predicting less than 5 percent growth by year-end, in contrast with the government's 5.7 percent target, on lower-than-expected government contribution to growth, weak exports and sluggish domestic consumption.
Stock market price benchmark the Jakarta Composite Index (JCI) is currently the worst performer in the region, slipping by 6.8 percent so far along the year, dragged down by massive capital outflows that have slashed foreign net buys to Rp 3.6 trillion currently from a peak of around Rp 15 trillion in April.
Michael said that around half of total respondents said that they would base their investment on market conditions over the next 12 years, meaning that they would factor slowdown into their portfolios.
'There might be changes in investment patterns. There's a possibility that they will opt for lower risk investments in the future,' he said. Around 63 percent of respondents said they preferred investments with low and medium risks.
'Investment instruments like equity mutual funds are still seen as the best long-term investment, but it's possible there might be a slight shift to balance mutual funds,' Michael added.
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