The Jakarta stock index may reach 2,500 by the year-end as investors remain confident with the local market despite recent setbacks clouding sentiment, including the most recent one - the Dubai World debt crisis.
Some analysts have feared that the Middle East debt problem could lead to another round of global financial problems and crises.
But, the resilience of the Indonesian economy amid the global crisis has proven the major draw for the local market, as compared to markets in other countries, the Indonesia Stock Exchange (IDX) president director, Ito Warsito said Monday.
"I am optimistic that the index can reach 2,500 by the end of this year," he said.
The index gained 0.93 percent to close at 2,415 Monday, signaling that fears on the default of investment firm Dubai World to repay loans that might lead to a second global crisis have receded as the UAE central bank backed up Dubai by easing conditions on credit for lenders.
"It *the Dubai crisis* will only be short lived, the market has started to act rationally," Ito said. Should the index reach 2,500, it means that the index would have grown by 84 percent from the 2008's closing of 1,355 points
Stock market analyst Felix Sindhunata said that the target was quite realistic, supported by positive growth in the country's economy and better-than-expected company earnings in the third quarter.
"The habit of fund managers to do so-called window dressing where they buy blue-chips shares to improve their portfolio at the end of this year will also bring good sentiment to the index," he said.
In a sign that reflected more confidence in the market, Ito pointed to four companies that plan to sell stakes to the public in December, bringing the total number of companies going public in the year to 12.
The four are electricity supplier PT Dian Swastatika Sentosa, steel producer PT Latinusa, state lender Bank Tabungan Negara and stainless steel pipe supplier PT Gunawan Dianjaya Steel.
Ito still expects that IDX would be able to meet the target of 15 new listed companies this year.
Two proposed IPOs - property developer Megapolitan Development and telco firm Sarana Menara
Nusantara - now expect to offer their shares to the public in quarter one of 2010, IDX director of listing Eddy Sugito said.
In the light of improved economic prospects for next year, IDX targets to have a total of 25 companies go public in 2010, Ito said.
He said the index may well reach 3,000 next year with a daily transaction value reaching Rp 4.5 trillion (US$477 million) up from the Rp 3.75 trillion targeted this year
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