JAKARTA: A risk for downgrading USs credit rating and slow process of debt settlement in Europe provide positive sentiment against equity markets in Asia, including Indonesia.Director General of Debt Management at Finance Ministry Rahmat Waluyanto believed that the foreign capital flow into government securities will continue to enhance in the second half of this year because of investors pessimism against the completion for US economic slowdown and debt crisis in Europe.Probably, total ownership for government securities [SBN} by foreign investors goes higher because the global situation doesnt provide opportunities for global investors to invest in Europe and US, he said yesterday.Based on the data of Director General on Debt Management, the amount of state securities traded by foreign investor was IDR194.97 trillion as per January 2011, nearly 30% of the total IDR649.95 trillion. This amount continues to rise and reached IDR243.93 trillion as per July or 34.83% of the total IDR700.18 trillion.According to him, the stalled US economy and European debt crisis will still last until the end of this year, curbing the banking rate on that two areas and somehow less appealing for investors.European debt crisis has spread to Italy, Portugal and Spain. International rating agency such as Moodys Investor Service has downgraded Greeces debt rating, thus the default risk is huge in Europe.Greeces default risk is huge. There will be many investors face bankruptcy. Investors prefer to penetrate Indonesia rather than suffer particular loss, he said.In United States, President Barack Obama warned the risk of the crisis through his speech at the White House, yesterday. According to him, the country's economy has a potency to face crisis if there is no agreement between the government and Congress to raise the limit on government debt.It would stimulate a deep economic crisis. This one caused almost entirely by Washington," he said in a speech quoted from the official White House site.He deeply regretted the attitude of Congress which does not demonstrate cooperation to solve economic problems in the country. In the past, raising the debt ceiling was routine.Since the 1950s, as Obama said, Congress has always passed it, and every President has signed it. President Reagan did it 18 times. George W. Bush did it seven times. And we have to do it by next Tuesday, August 2nd, or else we wont be able to pay all of our bills.The US President also reminded the threat of downgraded credit rating by international rating agencies from AAA, the highest level based on the countrys ability to settle debts. However, Obama believed that a deal with the Congress could be reached.Weakening dollarIn the meantime, dollar weakened against other counterparts in Asia, as commodity futures index in the US also declined.Dollar index in ICE Futures New York fell 0.3% to 72.914. The index compares dollar with other six counterparts. Meanwhile, Asia Dollar Bloomberg-JP Morgan Index, which trades 10 most active currencies in the region, strengthened by 0.1%. The top gainers amongst Asian currencies are South Koreas won and Malaysias ringgit.Head of economy of Singapore-based Credit Suisse group AG Joseph Tan stated there are a lot of concerns regarding US debt situation. it is clear that the debt is significantly affecting US dollar thus it is weaken against Asia currencies.PT Sinarmas Securitiess analyst Jeff Tan stated AS has a minor default possibility as it might harm global economic condition. He believed US will use all means to solve the issue.PT eTrading Securities analyst Wisnu Karto viewed as long as there is no decision on US debt, JCI will continue its positive trend amid the strong foreign fund to the country.Our capital market is bullish amid companies good financial performances in the first half.The Jakarta Composite Index (JCI) was closed yesterday with a new record of 4,132.78 or 1.12% higher compared to a day earlier. Meanwhile, LQ-45 index rose 1.38% to 731,0380.PT Indosurya Securities analyst Reza Priyambada said foreign buying follows such index strengthening, which recorded net foreign buy amounting to IDR81.4 billion.PT Citi Pacific Indonesia Head of Research Hendri Effendi said positive sentiment in the country is particularly derived from the outlook of the company financial statement. We need to be aware about profit-taking on blue-chip and second liner, he added. (15/18/Anggi Oktarinda/Aprilian Hermawan) (t01/t02/t03/t04/t05/t06/msw)

---

Artikel Terkait

Berita Lainnya

Berita Terbaru