Indonesia most risky stock market, says Morgan Stanley

South Korea Asian MarketsUS-based investment firm Morgan Stanley said in a report on July 4 that it considers Indonesia’s stock market to be the “most risky” in Southeast Asia, citing vulnerabilities based on capital flight and expensive stock valuations.

Foreign investors have sold about $210 million in assets so far in 2013, data compiled by Bloomberg show. The Jakarta Composite Index is valued at 2.8 times net assets, the highest level among 17 Asia equity measures.

The World Bank slashed its 2013 forecast for Indonesian growth to 5.9 per cent earlier in July, saying it sees cooling domestic demand and slowing commodity exports. The Indonesian central bank also just raised its interest benchmark rate, raising concerns that  loan growth will hurt banks.

The country’s equities recommendation was reduced to underweight from equal weight by Morgan Stanley in the report. CIMB Securities Indonesia also cut its recommendation on the nation’s stocks to neutral from overweight on July 2 and trimmed the year-end target for the Jakarta index to 5,075 from 5,250.

Higher energy costs, combined with monetary policy tightening, will probably hit already weakening investment growth and drag economic expansion to 5.7 percent in 2013, according to Credit Suisse Group AG.



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US-based investment firm Morgan Stanley said in a report on July 4 that it considers Indonesia's stock market to be the "most risky" in Southeast Asia, citing vulnerabilities based on capital flight and expensive stock valuations. Foreign investors have sold about $210 million in assets so far in 2013, data compiled by Bloomberg show. The Jakarta Composite Index is valued at 2.8 times net assets, the highest level among 17 Asia equity measures. The World Bank slashed its 2013 forecast for Indonesian growth to 5.9 per cent earlier in July, saying it sees cooling domestic demand and slowing commodity exports....

South Korea Asian MarketsUS-based investment firm Morgan Stanley said in a report on July 4 that it considers Indonesia’s stock market to be the “most risky” in Southeast Asia, citing vulnerabilities based on capital flight and expensive stock valuations.

Foreign investors have sold about $210 million in assets so far in 2013, data compiled by Bloomberg show. The Jakarta Composite Index is valued at 2.8 times net assets, the highest level among 17 Asia equity measures.

The World Bank slashed its 2013 forecast for Indonesian growth to 5.9 per cent earlier in July, saying it sees cooling domestic demand and slowing commodity exports. The Indonesian central bank also just raised its interest benchmark rate, raising concerns that  loan growth will hurt banks.

The country’s equities recommendation was reduced to underweight from equal weight by Morgan Stanley in the report. CIMB Securities Indonesia also cut its recommendation on the nation’s stocks to neutral from overweight on July 2 and trimmed the year-end target for the Jakarta index to 5,075 from 5,250.

Higher energy costs, combined with monetary policy tightening, will probably hit already weakening investment growth and drag economic expansion to 5.7 percent in 2013, according to Credit Suisse Group AG.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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