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Monday, December 28, 2009

IHSG the Best-performing Index in Asia Pacific: Fresh Fund-Raising Slumps to IDR38 Trillion

as published in Bisnis Indonesia daily newspaper
Monday, 28/12/2009 00:00 WIB
IHSG the Best-performing Index in Asia Pacific
Fresh Fund-Raising Slumps to IDR38 Trillion

JAKARTA: The Composite Stock Index (IHSG) on Indonesia Stock Exchange (PT Bursa Efek Indonesia/BEI) this year is considered the best-performing index in Asia Pacific.

From January to Wednesday last week, IHSG recorded an increase of 118.13% after it slumped by 58.65% last year due to the financial global crisis.

The Composite Stock Index, which is adjusted in the US dollar, has been ranked among the four best-performing indices in the world, competing with other emerging market stocks, such as Russia, Brazil, and Peru.

Emerging market stock markets in Asia, such as China and India, are not capable of competing with the IHSG’s whopping increase.

Associate Director for Equity Market at PT Reliance Securities Tbk Andy Porman Tambunan explained the surging index showed high short-term investment yield.

"Our market is growing better than China’s and India’s and has more promising short-term profit. However, the short-term profit will be shaky if there is negative sentiment from political realm, such as from the scandal of publicly listed PT Bank Century," he told Bisnis yesterday.

The case, he added, might put pressures on annual window dressing phenomenon. As a result, the IHSG increase to 2,474.88 is not in line with the market expectation, which projects index at 2,700-2,800.

President Director of BEI Ito Warsito viewed such an IHSG increase was normal as the index was corrected by 50.6% last year.

"It is normal. The substantial increase this year is attributable to Indonesia’s strong economic fundamental and publicly listed companies despite global recession.”

If the return growth in Asia Pacific is not calculated in the US dollar, the Indonesian bourse’s return growth ranked second at 82.59%, far below 111.12% recorded by the Shenzen index in China.

The Shenzen index on December 24 hit 1,168.17, soaring from 571.14 earlier this year, while IHSG on December 23 reached 2,474.88, jumping from 1,437.34 on January 5.

"But, we have to understand that the Chinese government intervened with the bourse by injecting funds into the stock market and requires investors to enter the market,” said Andy

Foreign investors only recorded IDR488.5 billion in net-buy last week of IDR8.83 trillion in accumulative transaction during the week.

Market cap
In line with soaring return, the bourse’s market cap jumped 66.58% from IDR1,143.19 trillion on January 5, 2009 to IDR1,904 trillion on December 23. In 2009, 13 new publicly listed companies entered the bourse by listing shares worth IDR3.835 trillion.

"The increase is triggered by the increases in the existing share prices and the new listing. PT Bank BTN shares contribute quite a substantial cap as it is the largest publicly listed bank among eight publicly listed banks.”

He viewed the government and BEI needed to bolster the number of capital market investors, so that more domestic investors could better enjoy the index.

In the meantime, fresh fund-raising in the capital market this year only reached IDR38.04 trillion or only 40.78% of IDR93.26 trillion recorded last year.

Data by the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) showed the low fresh fund-raising was attributable to lower IPO value this year.

PT Bank Tabungan Negara Tbk is the largest IPO company this year at IDR1.88 trillion, while the largest rights issue of IDR3.99 trillion was recorded by PT Bank Danamon Tbk.

The largest bond values are issued by Bank Mandiri (IDR3.5 trillion), PT Bank Ekspor Indonesia (IDR2.5 trillion), BRI (IDR2 trillion), and Indofood (IDR1.61 trillion).

Head of Research at PT Paramitra Alfa Sekuritas Pardomuan Sihombing explained there were fewer corporate actions this year due to the global economic crisis and to the fact that market players were still worried.

"In general, they did corporate actions in the second semester of 2009, which was a little bit too late," he said yesterday. (ags/21)

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