Sentiments rose, but may reverse: Survey<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Business confidence improved in Indonesia in the August-
\nSeptember period, buoyed up by a peaceful change in government in
\nlate July, but the September 11 terrorist attacks on the United
\nStates could well reverse the trend once again, according to a
\nsurvey.<\/p>\n
The Dana Reksa Institute, in its latest two-monthly survey of
\n700 corporate leaders in Indonesia, found all but one index to
\nhave shown some improvement in the August-September period,
\ncompared with the previous two months.<\/p>\n
The survey was conducted by PT Grup Riset Potensial.<\/p>\n
The report attributed the jump in the Business Sentiment Index
\n(BSI) to the nonviolent change in government from president
\nAbdurrahman Wahid to Megawati Soekarnoputri.<\/p>\n
An agreement by the International Monetary Fund to resume its
\nlending program in Indonesia in September bolstered the Present
\nSituation Index, while hopes that Megawati would breathe new life
\ninto the ailing economy strengthened the Expectation Index.<\/p>\n
The index gauging Business Confidence in the Government (BCGI)
\nalso rebounded to 112.7, from the 89.7 registered during the last
\ntwo months of the Abdurrahman administration. A reading of below
\n100 means that pessimism outweighs optimism.<\/p>\n
Optimism spread fast that the long-awaited recovery would
\neventually get back on track, with companies poised for a return
\nto profitability in the wake of Megawati's election, the report
\nsaid.<\/p>\n
However, the data on corporate performance did not support the
\nturnaround story, according to the Dana Reksa Institute.<\/p>\n
On the corporate front, the corporate performance index
\nslipped to 147.8 from 148.8, as there was little reason to cheer
\nabout corporate profit\/loss fundamentals.<\/p>\n
The earlier bearish sentiment had conspired with weakening
\nfundamentals to eat into corporate earnings, it said.<\/p>\n
The survey said that concerns remained, with companies still
\nuneasy about reaction within Indonesia to events in Afghanistan.
\nThey were also edgy about a highly unstable rupiah, with doubts
\nover the currency's ability to sustain the ascent shown in the
\nfirst weeks of August.<\/p>\n
The improved business outlook has been marred by lingering
\nconcerns over anti-U.S. protests, amid worries that the
\ngovernment was not taking action fast enough to make the country
\nsafe and orderly.<\/p>\n
As a consequence, the country's grim fundamentals had returned
\nto the forefront of investors' attention.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sentiments-rose-but-may-reverse-survey-1447893297",
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"sponsor": "Okusi Associates",
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