Jakarta: Investment management company Eastspring Investment Indonesia believes the improved macroeconomic conditions in 2020 will lead to a positive sentiment among the stock market.
According to the company's study published on Tuesday, February 18, 2020, the market estimates that Indonesia's economic growth will grow five percent in 2020, supported by domestic consumption, including household, investment and government spending.
"In general, the improvement in economic growth and investment conditions will bring about a good sentiment among the stock market," the study stated.
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The investment management company sees three important themes that will drive the market in 2020. First, the continuation of the global growth cycle with economic growth expected to improve in 2020, thus limiting the risk of recession. This is a favorable condition for risk assets, such as stocks, and positive for the manufacturing sector and sectors that are sensitive to interest rates.
Second, the potential shift in monetary easing to fiscal. An easy monetary policy and a low interest rate policy will be maintained until 2020. However, the fiscal policy is likely to be more important in 2020, especially in terms of encouraging global economic growth.
And third, the pause on the commercial war. Eastpring Investment sees that the conflict of trade war pressure between the US and China will shrink, along with the achievement of the phase one agreement, but it does not rule out the possibility of turbulence going forward.
IMF estimates that the world economy will grow 3.4 percent year-on-year in 2020, far better than 3.0 percent in 2019. (Antara)