JAKARTA: Stock market is predicted to show positive movement in 2011 amid risk of capital outflow due to profit taking on share and bond transactions.Head of Equity First State Investment Indonesia Hazrina R. Dewi said the growing concern on euro debt crisis and sudden Chinas economic tightening might drag market down.Despite having no direct impact to Indonesia, eurozone crisis can affect foreign investors' view of the risk.Yet, she believed market fluctuation will not influence Indonesia for long term due to strong economic fundamental.Investors soon or later will realize that our capital market is resilient even after Asian crisis, she wrote.An rating upgrade that could help Indonesia to achieve investment grade is projected to be in 2011 or 2012 at the latest. Indonesia's efforts to obtain investment grade is also potentially leading funds to flow into the stock market.Newly listed companies are also expected to have a significant influence to market capitalization.Optimism over economic condition and company's profit has made the investment manager to place the great portion for mutual fund shares. First State also plans for stock diversification next year.Commodity stocks are projected to increase amid commodity price hike. Other sectors related to the consumer goods will still dominate the market. (T05/NOM)
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