JAKARTA: Indonesia stock exchange is projected to be Southeast Asias second biggest market capitalization this year, reaching US$430 billion or IDR3,800 trillion, bigger than Malaysia's.Based on Bloomebrg data per June 15, Indonesias capitalization rose by 12% throughout this year to US$398 billion. The figure is twice bigger than Malaysia stock exchange's capitalization growth at 5.4% to US$428 billion.Singapore stock exchange is still Southeast Asias biggest market with US$569 billion in capitalization value.Michael Auyeung from Senantiasa Semerlang Sdn viewed Indonesia has a strong point either from demand and domestic spending or commodity prices.Up to June 15, foreign investors purchased Indonesian shares in the amount of US$1.7 billion or around IDR15.3 trillion. The figure was almost threefold bigger than the same period last year.In contrast, foreign investors sold their share ownership in Malaysia, stated Credit Suisse Group AG data. Foreign investors, until May, discharged US$200 million or IDR1.8 trillion at Malaysia stock exchange.PT Nomura Securitiess Head of Equity Research Willianto Le believed 2011 is the perfect momentum for Indonesia stock exchange to grow following the abundant natural resources potential, prospective demography condition dominated by working-age and a stable political condition.Share market will attract companies to gain fund as Indonesias cost of fund is lower. Indonesia has better risk profile as rupiah volatility eases.In his opinion, Indonesia stock exchange is still at a reachable level as price to earnings ratio is still in line with similar ratios in Asia Pacific stock exchange.Investment friendlyAt the moment, Indonesia secures good investment grade so that Indonesia stock exchange is traded as premium as Asia stock exchange. We back to the position before the economic crisis in 2008. We are now in the same line with Asia PE, added Le.PT Recapital Securitiess Head of Research Pardomuan Sihombing viewed Jakarta Composite Index potentially reach 4,500 in the end of the year due to the growing companies profit and Indonesias prospective investment grade.Nomura Securities economist for Asia Pacific Younghes Khatri stated there are 10 signposts to raise Indonesia's economic growth to above 8%.
Some of which are the to be released Law on land acquisition that will accelerate the infrastructure sector, higher government infrastructure spending realization and private and government cooperation scheme on key projects. (T05/NOM)
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