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.