Danamon sale further lifts sentiment in RI<\/p>\n
Dadan Wijaksana
\nThe Jakarta Post
\nJakarta<\/p>\n
The relatively successful sale of Bank Danamon is providing
\nadditional attractiveness for foreign investors to put their
\nmoney here amid growing uncertainties in other parts of the
\nregion.<\/p>\n
Some investors have already been encouraged by a host of
\nrecent positive economic data including strong first-quarter
\nexport performance, benign inflation, declining interest rates
\nand a much stronger level of foreign exchange reserves.<\/p>\n
All this has contributed to the strong appreciation in the
\nexchange rate of the rupiah against the U.S. dollar, and the
\nrally in the local stock market.<\/p>\n
As the country has been considered relatively free from Severe
\nAcute Respiratory Syndrome (SARS) with no reported deaths, while
\nother countries in the region are battling hard to curb the
\nepidemic, some investors have started to turn their investment
\nradar on Indonesia.<\/p>\n
\"Investment wise, Indonesia is now considered more attractive
\nthan many of the countries in the region under the unfavorable
\nglobal economy,\" StanChart economist Fauzi Ikhsan told The
\nJakarta Post on Tuesday.<\/p>\n
\"The country's continued improvement in its macroeconomic
\nstability should confirm Indonesia's competitive edge compared to
\nothers.\"<\/p>\n
Indeed, the rupiah strengthened to a 11-month high against the
\ndollar in morning trading, before closing flat at Rp 8,620 late
\non Tuesday due to profit taking.<\/p>\n
Dealers said that the sale of the government's 51 percent
\nstake in Bank Danamon to a consortium led by Singapore's Temasek
\nHoldings had lifted sentiment in the local currency.<\/p>\n
The Bank Danamon sale does not only mean more dollars to come
\nin, but is also a strong indication that the government is highly
\ncommitted to carrying out its economic reform program.<\/p>\n
The surge in the rupiah boosted sentiment in the Jakarta Stock
\nExchange, pushing the index one percent higher at 463.61, the
\nhighest level this year. Traders also said that the sale of Bank
\nDanamon had encouraged investors to buy other blue chip
\ncompanies.<\/p>\n
The government is also planning to sell another 20 percent
\nstake in Bank Danamon through the stock market.<\/p>\n
Thanks to a controllable inflation, the central bank has been
\ncutting its benchmark interest rate in recent past months.<\/p>\n
More good news came from the country's trading performance.
\nThe Central Bureau of Statistics (BPS) reported last week a
\nnearly 16 percent rise in exports in the first quarter compared
\nto the same period last year pushed by higher prices of
\ncommodities. The higher export revenue helped increase the
\ncountry's foreign exchange reserves to a record US$33 billion.<\/p>",
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