Indonesia among the most optimistic markets in Asia: Survey
Indonesia is the third most optimistic market in Asia after India and China, according to a quarterly investor survey by Dutch financial institution giant ING.
Despite global market uncertainty and the impact of U.S. sub-prime crisis during the first quarter of this year, the fast growing markets of India, China and Indonesia have gained the highest level of investor confidence.
The ING Investor Dashboard survey measures and tracks investor sentiment and behavior quarterly from 13 Asia Pacific markets, with each market assigned an investor sentiment score ranging from 0 (the least optimistic) to 200 (the most optimistic). India, China and Indonesia recorded the highest level of investor optimism scoring 168, 136 and 131 respectively. Other countries surveyed included Hong Kong, South Korea, Malaysia, the Philippines, Singapore, Thailand, Taiwan, Japan, Australia and New Zealand.
ING Asia chief investment officer Hou Wey Fook, however, said Indonesia - like the rest of Asia - was not insulated from global market uncertainty. According to Fook, 58 percent of Indonesian investors claimed the crisis had some how affected their investment decisions during the first three months of the year. "It is no surprise that Asia has not been spared the effects of the credit crunch and a slowdown in the U.S. economy," said Fook in a recent statement. "Investors throughout Asia are being impacted more by the global market's volatility because investors here also invest in global equity funds." He said Asian economies would remain robust in the long run despite financial market volatility. "It is likely GDP (gross domestic product) growth here will be impacted marginally and will be driven mainly by inter-regional trade and domestic growth," he said.
ING forecasted continued strong economic growth between 3 percent and 9 percent across the region this year. Last year, the Indonesian economy grew by 6.3 percent. The government has targeted growth to get stronger to 6.5 percent this year. According to the survey, investors in Indonesia and the rest of Asia prefer adopting a "wait and. see approach" and are considering investing in lower-risk businesses to ride out the current market uncertainty. "The ING survey shows. that most investors in Indonesia, like most of their counter parts in Asia, are moving toward holding cash deposits and gold during the first quarter, while investment in managed funds and stocks remained fairly consistent," said ING president director for Indonesia Robert Scholten. "This suggests investors in Indonesia are being fairly conservative."
Moreover, 17 percent of Indonesian investors considered continued investment in global commodities including oil, gas, mining and water in the second quarter of this year.