CAPITAL MARKET
Indonesia had experienced economic devastation that had been built through the joints of the new order policy began crawling back construct the foundation of the economy . International Financial Corporation ( IFC ) classification of stocks linked to the classification of the state . If the country is still classified as a developing country , the market in the country is also in a developing stage , although market shares are fully functional and well organized .
Developed capital markets can be identified through a country , whether the country is a developed country or a developing country classified . Indicator is the per capita income of a country , which is usually included in the low to middle- income countries . But the most striking characteristic is seen the value of the market capitalization of companies listed , the cumulative trading volume , the tightness of capital markets regulation , sophistication and culture to domestic investors .
Developed capital markets can be identified through a country , whether the country is a developed country or a developing country classified . Indicator is the per capita income of a country , which is usually included in the low to middle- income countries . But the most striking characteristic is seen the value of the market capitalization of companies listed , the cumulative trading volume , the tightness of capital markets regulation , sophistication and culture to domestic investors .
Consequences of growing capital market is a small market capitalization value . A measure of market capitalization ratio is usually seen from the comparison with the value of a country's gross domestic product . In addition to the other consequences is the presence of thin trading volume (thin trading ) caused by trade ( non - syncronous trading ) on the market . Synchronous trading is not caused by the number of securities traded not entirely , meaning that there is some specific time in which a securities transaction does not occur ( Hartono , 2003) . Indonesia which is still listed on the IFC is still a developing country with the worst investment climate in the East Asian region . Even with a record like that , in fact we are still considered by foreign investors . The fact that there are national companies with actually being in the strategic sectors of the country , offered by some foreign institutions through the acquisition of shares . The presence of capital inflows as investments in general is foreign investment should be a booster of the macro economy . The main reason for foreign investors to move their funds to developing countries is that developing countries have the potential untapped business entirely , as in the classic motifs of investment to other countries . Michael Fairbanks and Stace Lindsay senior consultant at Monitor Company express purpose of foreign investors coming to the poorer countries is usually only see an opportunity to attract natural resources , cheap labor and wages as the target product or service that is not good quality .
But there are other reasons that accompany such motives , the striking differences with developed countries . If we use a life cycle approach to the business of developing countries into the category growth (growth ) than developed countries that fall into the category of ripe (mature ) . It means that there is the attraction of high economic growth which of course is accompanied by a high return anyway , because economic growth is an aggregate indicator of industry in a country . For example, the mobile telecommunications business in Indonesia, which explored the new solid in Java alone , while outside it still has high potential to serve new markets .
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