Positive outlook on local market: Sachs

Positive outlook on local market: Sachs

JAKARTA (JP): Goldman Sachs of the United States forecasts a positive outlook on the Indonesian equity market this year despite continued drops in share prices in the last three weeks.

In its latest World Investment Strategy Highlights bulletin, Goldman Sachs projected that the Jakarta Stock Exchange (JSX) Composite Index will most likely appreciate by 14 percent to 480 in the next three months and by around 24 percent to 525 by December from the current level of 424.

"Goldman Sachs is two times overweight in its allocation in Indonesia, where forecast local currency returns are 20 to 25 percent," the bulletin said.

It estimated that the Indonesian economy would grow by over 6.5 percent as the result of a significant increase in fixed investment and private utilization.

"Following a dismissal performance in 1994, exports should accelerate due to the expansion of the economy," it added.

The investment bank also advocates a positive outlook on other Asian markets such as Korea, Hong Kong, Singapore and Thailand.

The Korea Stock Price Index is estimated to increase from the current level of 954 to 1,050 in the next three months to 1,200 by December. Singapore's DBS-50 index is projected to rise to 506 in the next three months to 640 by December from the current 507.

Hong Kong's Hang Seng index is expected to grow to 8,000 in the next three months to 9,000 by December from the present level of 8688, while the Thai Stock Exchange index is to rise from the current level of 1,202 to 1,380 to 1,540, it said.(hen)