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Indonesia ranked fourth in countries with the highest return
on equity in 2007 and is likely to perform better this year in line
with other investment possibilities in Asia, Deutsche Bank said
Wednesday.
The return on equity investment in the country averaged 54.1 percent
thanks to the economy that grew by 6.3 percent last year, Deutsche Bank
chief investment officer Chew Soon Gek told reporters in Jakarta.
"Indonesia's position comes after the China free area in third place
with 66.2 percent, India in second place with 73.1 percent and China's
domestic market at 96.6 percent," she said, citing reports from
Bloomberg.
The equity returns in Indonesia, she said, were apparently higher than
its "strong" regional counterparts such as Singapore with 28.3 percent
and Japan with minus 4.1 percent.
The Asia region as a whole, excluding Japan, gave an average return of
40.5 percent, far above Europe with 14.4 percent.
Chew also said Asia would not be affected by the U.S.-led subprime
mortgage crisis as the region now included emerging economies that
helped to stabilize the global supply-demand chain, particularly China.
"We are positive the Asia equity market will promise better returns
because their economies are improving and not much affected by the U.S.
economic subprime crisis," she said
For this year, she recommended investments in agribusiness commodity
futures, particularly those in soybean, corn and wheat.
"The improvement of the economic condition in Asia helped to improve
people's purchasing power. This led to the higher demands for foods
with high proteins. Thus, an increase of prices," she said.
For conservative investors with high yield expectations, she
recommended gold and hedge funds -- an instrument to protect investment
capital from inflation, global economic turmoil and the weakening of
the U.S. dollar.
"The gold prices will likely hike up to US$1,000 per troy ounce in this
twelve-month (period). That is why it's still profitable like it was
last year," she said.
Last year, gold saw 31.4 percent in returns and international current
prices stand at around $923 per troy ounce.
Chew said she recommended global investors put 20 percent of their
capital in hedge funds to make sure all of their investment didn't
slump if stock markets went down.
"Hedge fund returns are attractive and remain stable due to its
favorable diversification," she said.
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