So here’s the update of the latest Indonesia capital market situation. JCI up to 21 April 2010 has gained 14.93% YTD, this made the P/E ratio up to 20.87, second largest after China CSI 300 (P/E 25.27). Meanwhile the IDR appreciate against USD to Rp9008/USD from Rp9447/USD at end of 2009. So what’s happening here?
Since the US government is heavily on debt and they keep printing money, the market is filled with USD. With the economy condition still crawling to recover, the investors try to search an alternative place to invest their USD.
Euro is not a good choice with their debt trouble. China and India is perceieved to be already expensive. The last choice is to enter the emerging market. And there is Indonesia. Foreign fund start to inject the market. They enter the government bond market which pressing the yield to 8.99% (tenor:10 yrs). And they enter the stock market which led the rally on blue chips stocks. Better worry for the bubble, because “easy come easy go”.
fakeconomist 