Indonesia’s stock market had a tough 2013, falling 22% in US dollar terms. But this year the Jakarta Composite index has regained the top spot among Asian equity markets. And Nomura Securities reckons “the worst might be over”.
Last year’s jitters over reduced quantitative easing (QE) by the US Federal Reserve hit stocks and the rupiah hard. The prospect of money fleeing emerging markets reminded investors that Indonesia was among those most dependent on foreign capital: its current-account deficit exceeded 4% of GDP in the third quarter.
But the external deficit has since improved, leaving Indonesia less vulnerable [...]
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