Foreign Fund Inflows to Continue: Central Bank
Bank Indonesia is optimistic that foreign capital will continue to flow into the country, as foreign investors put their money into domestic stocks and bonds and help the country’s bourse and currency strengthen further.
The comments from a senior official at the bank were made on news that the Jakarta Composite Index breached 2,000 to hit 2010.91 at the close of market on Wednesday, the highest since September, while the rupiah strengthened to 10,230 per dollar compared with 10,250 the day earlier. The currency has gained 4.9 percent since January.
“We can observe that there has been a surge in capital inflows,” Miranda Goeltom, the outgoing central bank’s senior deputy governorsaid on the sidelines of a hearing with the House of Representatives, adding that a brighter outlook for the world’s economy would prompt more investors to put their money into Indonesian stocks and bonds.
“Many people are putting their money in the capital or financial markets, but even more are investing in the bond market, because it offers good yields,” she said.
According to a document from the Ministry of Finance, foreign ownership in Indonesian government bonds has improved steadily since March.
In February, more investors were selling Indonesia’s government bonds than buying them - with net foreign selling standing at Rp 5.12 trillion ($507 million) - but the situation has now reversed with more investors buying in since April. Net foreign buying of Indonesia’s government bonds stood at Rp 5.19 trillion as of the end of May. The figure has steadily increased from Rp 3.88 trillion in April.
Net foreign buying for shares traded on the Indonesia Stock Exchange had also improved at the end of May, from end-February’s position. While in February, net foreign selling amounted to Rp 562 billion, by the end of May, net foreign buying stood at Rp 1.97 trillion.
From a global perspective, the central bank believes there are increasing signs that global economic growth could improve next year.
The comments from a senior official at the bank were made on news that the Jakarta Composite Index breached 2,000 to hit 2010.91 at the close of market on Wednesday, the highest since September, while the rupiah strengthened to 10,230 per dollar compared with 10,250 the day earlier. The currency has gained 4.9 percent since January.
“We can observe that there has been a surge in capital inflows,” Miranda Goeltom, the outgoing central bank’s senior deputy governorsaid on the sidelines of a hearing with the House of Representatives, adding that a brighter outlook for the world’s economy would prompt more investors to put their money into Indonesian stocks and bonds.
“Many people are putting their money in the capital or financial markets, but even more are investing in the bond market, because it offers good yields,” she said.
According to a document from the Ministry of Finance, foreign ownership in Indonesian government bonds has improved steadily since March.
In February, more investors were selling Indonesia’s government bonds than buying them - with net foreign selling standing at Rp 5.12 trillion ($507 million) - but the situation has now reversed with more investors buying in since April. Net foreign buying of Indonesia’s government bonds stood at Rp 5.19 trillion as of the end of May. The figure has steadily increased from Rp 3.88 trillion in April.
Net foreign buying for shares traded on the Indonesia Stock Exchange had also improved at the end of May, from end-February’s position. While in February, net foreign selling amounted to Rp 562 billion, by the end of May, net foreign buying stood at Rp 1.97 trillion.
From a global perspective, the central bank believes there are increasing signs that global economic growth could improve next year.