Indonesia Stock Index, still got a lot of room to go…
Posted by admin in Kelvin's True Life Trading Stories, Market Analysis, Trivial of Life
In 2004, when I first stepped in Indonesia, to be honest, I was very skeptical about the place. First encounter that I had bad already when the Immigration Officer wanted something ‘more’ from me when I passed the passport to him for stamping. My friend came into the picture and gave 1 piece of the blue note to him and I was given the first ‘warm’ smile to go through the gate… I shook my head in disbelief.
The airport was chaotic then and people were pulling tourists to sit their taxi or personal cars… at exorbitant rates. Normal cab fair from Airport to City, cost about Rp130,000 on meter. The guys were asking for Rp200-250,000 instead, which in honesty, is relative cheaper considering the distance between the 2 locations IF you compare to Singapore rates. (then approximate 100,000Rp = S$20).
Then the road from the airport to the city was really bad… pot holes were littered throughout the journey and you can see beggars walking towards your car whenever your car stop at the junction or due the incredibly heavy traffic congestion. (But Thailand, in my opinion, is still the worst)
Then I had an Indonesia friend who been trading in the market for 2years. I shared with him my insight that despite all these, I see great potential instead. Its like a GEM deep inside a stone. The current shape may be bad but after much polishing and enhancement, the GEM will unearthed and it will sparkle. Its like fat and rich piece of land, waiting for proper cultivation. I asked him about the stock Index. He told it around 800.
I still remember, saying this to him:
” BUY Indonesia stocks now! Now its 800. I foresee it heading to 1000 to even 1600 in 3-5years time.”
My Friend laughed at me… as he disagree as he believe the great amount of bribery, opposition parties and huge discrepancy between the rich and poor will be the main obstacles and barriers.
2 years later, the Index hit 2830 high!
On Oct 27, 2008, the Index hit a low of 1089. Down 61% from its high. The Dow was also sold down and it lost 54% from its high of 14,198.
Today, the Jakarta Index traded 3115 while Dow closed 10,014 last night. Can you see the potential of this market IF Dow is to recover back to 12,000 level which I think is a fair value after this year’s consolidation. I am looking at Jakarta Stock Index to hit 3950 by the end of 2011.
You can call me over optimistic but I am rarely wrong in the Macro Picture of the World Economy and I have sticking to what I believe of the Indonesia market. Nowadays, I see no more asking of blue notes at the Immigration, better roads to the airport, lesser beggars on the street. All these point to progression of the country. So if this is to continue, Asia top 3 most populated country will definitely see their Index hitting to record high when the world’s economy recovers as a whole but of course, I must warn here… the recent inflation rate in Indonesia have been rising so one must be prepare if it go overboard… we dun wish to see another round of Crazy Bull like the NASDAQ (from 1997-1999) or the Chinese market (from 2005-2007) but of course, that will not happen so fast… maybe in late 2011 or early 2012?
So before all BIG Selling, we will always see the BIG Crazy Bull first… and now, we are still very far from it… Enjoy the Ride!
Disclaimer applied.
Kelvin Han
V3Go System Originator
ery closely to people’s requests, concern and most importantly, their psychology aspect towards trading. Every trainer, training school can say they have better techniques than the rest… but for me, I think if the Trainer can understand the student well enough and cater to their needs then even if you passed the best techniques to him/her, most likely he/she may not grapse it properly and lead to more problem.
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