New government will positively rebound property market

The new government is expected to support property growth, as demand for residential properties is on the increase.

Joko Widodo and Jusuf Kalla’s success in winning the presidential race is believed to be influential towards accelerating the property market during the second half of 2014, as numerous property developers and investors have left speculation mode in terms of investment.

The peaceful political process has also been viewed positively, strengthening market confidence towards the future of the country’s property sector. Additionally, active transactions were viewed during the month of Ramadhan and Idul Fitri, further signalling optimism that the property market is bouncing back.

Hendra Hartono, property consultant and CEO of Leads Property Indonesia, alongside Joyp Rusli, chief marketing officer of Lippohomes, expressed confidence in the property sector for the third quarter this year. 

Foreign developers keen on Indonesia's property market

A number of foreign developers have laid eyes on Indonesia’s property market owing to the country’s massive population and economic growth of 5.5% - the highest of South East Asia.

It has been reported, investors from China, Korea, Malaysia and Singapore have expressed interests in extending property businesses to Indonesia. The property project types they are interested in, vary from residential projects including apartments to commercial projects, such as shopping centres and industrial estates.

For example, the Singaporean based Pacific Star Holdings Pte Ltd., intends to manage one property project in the Sudirman Central Business District (SCBD) in Jakarta and another one in Bali.

This is as they cited data from the United States Trade Department, highlighting that Indonesia quarters the world’s fourth-most populous country with 253.60million people, as the reason for investing towards the country’s property sector. It selected Jakarta as the project site, owing to the city’s profitable nature for property development.

The big 6 Asian markets of 2014

Yesterday, BlackRock released its investment outlook for Asian equities and credit, where it was reported Indonesia, China, India, Japan, Korea and Taiwan are the significant markets to watch during the latter half of this year.

This is as it was claimed structural reforms remain to dominate the agenda and outlook for stock markets across the region.

China

The head of Asian equities at BlackRock claimed that the Chinese leadership continues to motivate the domestic reforms process, as there has been added value and risk as the year has progressed. This is particularly in the energy and industrial sectors.

India

The election win of the BJP may access India’s potential by rebooting its investment cycle. The decisive election result may improve government decision making and execution, which in turn would boost investment in energy and infrastructure, opening more employment opportunities.

Korea and Taiwan

According to a representative from BlackRock, Korea and Taiwan should be beneficiaries of global and improved export growth.

Japan

Japan remains to add liquidity even as the economy absorbs the increase in consumption taxes. Investors should expect more reform progress.

Indonesia

The market has delivered exceptional returns so far during 2014. However, Indonesia is currently under elections, with market positioning, valuations, plus the risk of negative surprise subsequent of the upcoming July elections adding some caution. Although, any sell-off following the election would be a buying opportunity.

International tyre maker opening plant in Indonesia

Taiwanese Cheng Shin Rubber Industry Company, one of the country’s leading tyre suppliers, have announced they will invest US$300million in constructing a plant in Indonesia.

The construction is scheduled to commence early next year, with operations expected to begin production towards the end of the same year. The company is to target the Indonesian domestic market rather than exports, as revealed by the Cheng Shin President during a yearly general meeting for share holders.

The automotive market of Indonesia is said to be rapidly growing, encouraging Cheng Shin's clients to request towards the Taiwanese supplier to establish local production lines.

It was informed that the company's shareholders with Cheng Shin, plans to use the Indonesian market as a springboard to enter other Muslim markets.

A fund raising campaign is also to aid for the Indonesia investment.

When the Indonesia factory becomes operational, there are plans for a wider global production base in Asia, including plants in China, Taiwan, Thailand, and Vietnam.