Ika Krismantari, Jakarta – The latest data from the Indonesian Central Securities Depository (KSEI) shows that foreign investors controlled 66.1 percent of assets in the local stock market, signaling a return of foreign investor confidence.
As of Aug. 6, figures from the KSEI stated foreign investors held Rp 715.97 trillion (US$72.31 billion) worth of assets – shares and bonds – while local investors only owned Rp 368.27 trillion worth of assets.
The KSEI data also included paper-less trading at the Indonesia Stock Exchange (IDX), which accounts for about 60 percent of total trading.
KSEI director Trisnaldi Yulrisman said foreign investors' total asset value and ownership of securities in Indonesia had grown steadily in the past five months, as they expected the global economy crisis would bottom out this year, thus increasing their appetite for assets in emerging markets like Indonesia. "We hope this trend will continue until the end of year," he said.
KSEI data indicates the market has returned to its pre-crisis level. Total asset value in July stood at Rp 1,171 trillion – close to last year's total asset value of Rp 1,202 trillion – mostly as a result of foreign investors owning more shares in that period compared to last year.
The total value of shares recorded this July was Rp 1,057 trillion, compared to last July's Rp 1,089 trillion.
July and August 2009 KSEI data showed that foreign investors owned beyond 60 percent of total assets, higher than the 59 percent of total assets they owned in the same period this year.
The KSEI data therefore demonstrates foreign investors have returned to the Indonesian market, after fleeing it last year when the Jakarta Composite Index plunged by more than 10 percent.
After the crash, the value of total assets recorded by the KSEI dropped to Rp 726 trillion, with the total value of shares at Rp 632 trillion.
With the Indonesian economy remaining solid and continuing to grow this year, many analysts believe investors will still be confident enough to invest here.
The better-than-expected earning results of companies in the first half of this year have also injected a more positive sentiment into the market, encouraging investors to re-enter the local market.
The latest data from the IDX shows foreign investors bought more shares than they sold in between July 27 and July 30, with share purchases reaching Rp 8.3 trillion, compared to Rp 4.4 trillion in sales of shares.
The Jakarta Composite Index has risen more than 70 percent since the beginning of this year, making the IDX the second best performing bourse in Asia.