Wednesday, August 3, 2011

Indonesia in the Middle of Asian Revival

21st CENTURY believed to belong to Asia. Economic revival of two giants, China and India, will create a new history of the world economy, so Asia is becoming the center of world attention. All want to be part of the resurgence of Asia.

Therefore, a variety of economic cooperation between countries is growing in Asia. Likewise, a growing number of multinational business into Asia, want to benefit from Asia's economic revival.

Optimism has been growing confidence of other Asian nations, particularly the emerging economy, that they could also rise. Just imagine, Asian nations that formerly were colonies of Europe or America has risen and is ready to lead the world, a world economic superpower.

But according to a report in The Standard Chartered Super Cycle Report on 15 November 2010, submitted that China will become the economic superpower in 2020, the world's largest economies, and India will become the economic power of the world's number three in 2030, shifting Japan and Germany.

What about Indonesia?

According to the report, Indonesia can be a star performer, with the economy the number 28 in 2000, will be number ten in 2020, and number five in 2030. The report uses the assumption of Indonesia's economic growth of seven percent (almost) on average per year in two decades to come.

Indonesian economy can grow rapidly and developed with the support of natural resource exports and industrialization. In addition, the proximity of Indonesia with China could be advantageous if can increase its manufacturing capacity with high added value products, so China will be supplying capital goods and helper.

This means that although Indonesia has the potential to become one of the major economic force in the future, need to sustain economic growth and overcome its economic problems are still a lot.

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Tuesday, August 2, 2011

Most Prospective Investment in Indonesia

Indonesia more charming in the eyes of investors. This is reflected in credit default swaps that measure perceptions of foreign investors against the risks of investing in Indonesia are more sloping. Indonesia CDS debt movement for all tenors sloping, well below the average during the past year.

CDS tenor of five years, for example, now in the position 133.25. That figure is far below its average level in the last year, 141.044, much less than the highest position in 2011 to reach 163.74. Likewise CDS for debt maturity of one, three, seven, and ten years.

At CDS eroded, the flow of foreign funds (capital inflow) entering the financial market instruments Indonesia faster. Until last weekend (28/07/2011), foreign investors are parking money in Government Bonds (SBN) to Rp 247.5 trillion or 25.3 percent of total government securities that can be traded.

SBN grew 26.9 percent during this year, up to Rp 12.5 trillion during July 2011. "One of this month, foreign investors are more invaded bonds than stocks," said Lana Soelistianingsih, economist Samuel Securities, Monday (01/08/2011).

Foreign funds in the stock market as well as Certificates of Bank Indonesia also continues to climb. Composite stock price index, on Monday, hit a record all-time high at 4193.44 position, while the rupiah at Rp 8464 per U.S. dollar. "In the emerging markets there is nothing as attractive as Indonesia," said Stephen PS, capital market observers UOB Kay Hian Securities.

In addition to an attractive yield factors, the economic prospects of Indonesia became the largest towing foreign investor interest. Mirza Adityaswara Economist shows, Indonesia's macroeconomic indicators are still far better than the United States and Europe. Moreover, if inflation is maintained stable until the end of the year. Without the increase in fuel oil, inflation to close the year, in the calculation, will range between 5 percent and 5.5 percent.

With this situation, he predicts the portion of foreign funds could reach 40 percent of all funds revolve at the end of this year government securities. "In stocks, foreigners will be venturing into small-cap stocks," said Mirza.

A Prasetyantoko, Atmajaya University economist, added, excess liquidity in global markets is still huge. Indonesia became the choice among emerging market economies as motors of the world, like USA, Europe, and Japan, yet stable.
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