Indonesia’s Bonds Advance as Growth Outlook Spurs Funds Inflows
November 14, 2011, 4:46 AM ESTBy Khalid Qayum
Nov. 14 (Bloomberg) -- Indonesia’s government bonds advanced and the rupiah was stable on optimism foreign funds are adding to their holdings of the nation’s assets to benefit from growth in Southeast Asia’s largest economy.
The MSCI Asia-Pacific Index of regional shares rose on confidence new Italian and Greek leaders will help resolve Europe’s debt crisis. Overseas investors bought $131 million more Indonesian shares than they sold this month through Nov. 11, according to exchange data. Foreign ownership of Indonesian bonds increased to 222.17 trillion rupiah ($24.8 billion) as of Nov. 11 from 219.78 trillion at the end of October, the finance ministry’s website shows.
“There is strong demand for Indonesian bonds and equities,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. in Singapore. “Slightly positive news out of Italy and Greece has helped. We are seeing positive sentiment in Asian equities and currencies.”
The yield on benchmark 8.25 percent bonds due July 2021 dropped three basis points, or 0.03 percentage point, to 6.19 percent today. The rupiah was little changed at 8,968 per dollar, from 8,967 at the end of last week, as of 4 p.m. in Jakarta, according to prices from local banks compiled by Bloomberg. The currency rose as much as 0.2 percent earlier.
Bank Indonesia reduced its benchmark interest rate by 50 basis points to 6 percent last week to boost economic growth. The central bank predicts gross domestic product will increase 6.5 percent in 2011 after gaining 6.1 percent last year.
The economy expanded 6.54 percent in the three months through September from a year earlier, compared with a revised 6.52 percent in the second quarter, the Central Bureau of Statistics said on Nov. 7.
--Editors: Greg Ahlstrand
To contact the reporter on this story: Khalid Qayum in Singapore at kqayum@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
