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Indonesian capital market in bullish trend
Last Updated(Beijing Time):2007-06-27 10:42

The Indonesian capital market is growing rapidly as the demand for portfolio investments is so massive the market cannot catch up with supplies, the market watchdog said Tuesday.

"The market grew by 17 percent at the present time, slower than a magnificent 55 percent growth in 2006. We expect the growth will reach 34 percent by the end of 2007," said Fuad Rachmany, head of the Capital Market and Financial Institution Supervisory Agency ( Bapepam-LK).

"The global market is making fast growth, but the Indonesian market is growing even faster," he said when opening a seminar in Jakarta.

Fuad warned that the imbalance between supply and demand could pose risks to the growing market.

"This could lead the local market to an 'over price' situation," he said without elaborating.

Daily transaction in the Jakarta Stock Exchange averaged 3.4 trillion rupiah (376.5 million US dollars) in five months ending May this year, against the average 1.8 trillion rupiah (199.3 million dollars) in 2006.

Market capitalization already hit 1,500 trillion rupiah (166.1 billion dollars) in the first five months of 2007, equivalent to about 45 percent of gross domestic product, against 1,239 trillion rupiah (137.2 billion dollars) in the whole 2006, he said.

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