The Indonesia Stock Exchange’s Composite index may rise 23% by the end of the year after a record decline in 2008 on expectations the elections will promote stability, the nation’s biggest pension fund said, Bloomberg News reported.
The index may end the year at 1,800, PT Jamsostek investment director Elvyn G. Masassya said in an interview with Bloomberg, 23% up on present levels.
The nation has drawn the second-highest equity-fund inflows this year among nine Asian economies tracked by the news agency.
“This is the time to build up our investment in stocks that have good fundamental values,” said Masassya, who oversees Rp61.7 trillion ($5.5 billion) in assets.
Jamsostek would be looking for new investments in infrastructure, mining and finance stocks, and the fund would increase its stock allocation from 15% of its investment portfolio, he said, without providing a figure.
M.S. Hidayat, chairman of the Indonesian Chambers of Commerce and Industry (Kadin), said Friday that a bigger mandate for President Susilo Bambang Yudhoyono in July’s presidential elections should create the synergies to deal with the effects of the economic crisis.
“We are going to face major challenges such as unemployment during this global crisis. To overcome such challenges, we need a strong political coalition to ensure fast delivery of any economic policies,” The Jakarta Post reported him as saying.
“We need a strong government whose decision and polices will be fully backed by the House of Representatives, so that there will be no more unclear regulations or policies,” said Thomas Darmawan, head of the Indonesian Food and Beverage Association (GAPMMI).
Meanwhile higher industrial activity in the first quarter of 2009 indicated an increase in electrical power consumption, the Post reported.
Finance Minister Sri Mulyani Indrawati said Monday power consumption by industry rose 2.5% in the first quarter of 2009 compared to the previous quarter.
This signaled that industries have continued producing goods amid the global economic downturn because of higher demand in the domestic market, she said.
Indrawati however warned that a pick-up in electricity in the first quarter was not significant on its own, since it was still well down on the same period last year.
There was also caution over improved export figures to the US, one of Indonesia’s major markets. While the rise in exports to the US in February improved on January lows, officials said the result did not reflect the general trend.
The Central Statistics Agency (BPS) reported earlier that non-oil and gas exports to the US rose by 3.9% to $802.4 million in February from $772.3 million a month earlier. Indonesia exports mainly footwear, textiles and garments and relatively simple electronic devices and consumer goods to the US.