XINHUA/Indonesia to remain attractive destination of global funds: expert
JAKARTA, Dec. 9 (Xinhua) -- Securities analyst said Indonesia will remain one of the world's most attractive destinations for global portfolio investment thanks to the country's healthy economic growth, the local daily Jakarta Post reported Thursday.
Matthew Brown, head of Citi's Asia Pacific Fund Services, said at a seminar on market outlook held here, that Indonesia's overall economy showed a significant growth opportunity, which made it an attractive destination for foreign funds.
"The recovery will continue ... There will be a lot more capital flow to Asia. The Europe and United States are looking for new opportunities and that's important," he told reporters on the sidelines of the seminar on Wednesday.
The Indonesian Stock Exchange (IDX) is among the best performing stock markets in Asia this year. The benchmark Jakarta Composite Index (JCI) has grown about 45 percent so far this year as foreign investors continued to pump funds into the Southeast Asia's biggest economy, the daily reported.
On Wednesday, the index rose 1.28 percent to close at its new record high of 3,769.99.
Brown explained that approximately 60 trillion U.S. dollars was seeking to be invested at present, 48 trillion U.S. dollars of which is owned by European and U.S. investors. "The funds are in the process of re-evaluation and asset restructuring that's going to result in increased capital flow, which will continue in the next two or three years," he added.
Investors, according to Brown, always want exposure in emerging markets to some degree, and Indonesia is among them.
With near-zero rates in developed nations like the U.S. and Japan, Indonesia's 6.5 percent benchmark interest rate has attracted foreign investors to invest in both debt and capital markets.
About 115.3 trillion rupiah (some 12.7 billion U.S. dollars) of foreign funds have entered the nation's stock and debt markets so far this year, a condition that has worried regulators due to fears over a sudden reversal that could hamper economic activities.