'Business sentiments improve'

'Business sentiments improve'

The Jakarta Post, Jakarta

The country's business players are looking to the future with
increased optimism as business sentiments have improved thanks to
the restoration of security and order, a consultancy firm said.

Danareksa Research Institute, citing its February-March
survey, said the business sentiment index rose 1.1 percent to
110.2 in the survey period, while the expectation index climbed
to 120.2 from 119.0.

The present situation index (PSI) rose from 99.1 to 100.1 to
mark a shift into positive territory, it said.

Optimism has now sprung among the country's business players
after their sentiments dived following the Sept. 11 terrorist
attacks on the United States and the floods that severely hit
Jakarta and other parts of the country, as well as the high
inflation in the first two months of the year, it said.

Sentiment on current performance -- sales, profits,
production, liquidity and capital spending -- was all sanguine,
as the rebound of sales turnover, both in sales volume and
prices, reinvigorated investor sentiment.

Business began functioning again at a greater intensity to
catch up with the missed yearly target, with all measures that
assess business prospects over the next six months standing in
support of a sound outlook.

The restoration of order and security gave optimistic views
for any enterprise to function properly.

Irrespective of the improved sentiment on the government to
restore order, doubts over its ability to sustain the momentum
remain, as the index measuring confidence in the government
slipped to 106.1 from 107.2, the agency said.

The rising prices of stocks, the rupiah and goods, have
encouraged entrepreneurs to invest in illiquid products, a
precursor to a revival of the economy if the cycle is not broken
by any frightening event.

"It is the government's responsibility to prevent the
recurrence of any confidence-shaking event that may shock
businessmen," the agency said.

The increase of purchase orders from one company to another
marks an upturn in business developments and has originated from
robust consumer spending in the aftermath of the flooding and
soaring inflation.

Consumers have injected additional amounts of cash activating
the flow of goods from retailers to wholesalers, before later
placing orders with manufacturers as orders deluge traders.

Manufacturers have regained faith in the ability of their
plants, not only in making better use of their existing machines
and employees, but also in enlarging their scale of operations.

As such, the self-justifying cycle of confidence and liquidity
have kept rolling to spark the liquid markets of stocks and
currencies.

The survey includes more than 700 chief executives or
directors representing a wide variety of leading companies in the
following sectors: construction, agriculture, finance,
transportation and communication, manufacturing, hotel and
restaurant services, mining.