Financial Instruments in Indonesia

Financial / 19 October, 2019

Financial Instruments in Indonesia

Financial Instruments in Indonesia – Financial product instruments in Indonesia, currently still lacking more appreciation among the people of Indonesia.

According to Chairman of the Board of Commissioners of the Indonesian Deposit Insurance Corporation (LPS) Halim Alamsyah, the ratio of Third Party Funds (DPK) to Gross Domestic Product (GDP) is only 40%.

This value is still less than Malaysia in the range of 70% and Thailand which is above 100%. Even according to Halim, over the past 20 years it has been difficult to penetrate the ratio above 40%. Actually, how is the development of DPK in Indonesia?

Data from the Financial Services Authority (OJK) for the period July 2014-July 2018, DPK continues to move up. This year, DPK grew 6.8% Year-on-Year (YoY). This value is lower than the growth of July 2016-July 2017 reaching 9.7%.

This slowdown seems to be a sign if the Indonesian people begin to switch to other instruments including stocks. To prove it, let’s look at the movement of the instrument.

Since the beginning of the year, buying by domestic investors has apparently been higher than selling. Since the beginning of the year, the Composite Stock Price Index (CSPI) recorded a net buying action of Rp 54.54 trillion. Then, where else will the flow of money the Indonesian people? According to Halim, supporting Indonesian people prefers investment in non-financial means. Is that true? Let’s take one of the instruments in the sector, let’s say property.

Based on a Bank Indonesia (BI) survey in quarter II-2018, demand for commercial property reached 1.98% YoY. This figure is higher than the first quarter which was only 1.92% YoY. Currently the trend of home ownership is not only a place to live, but also investment.

Based on a team survey, Business Intelligent Rumah123, millennials in big cities position themselves as investors when buying a house. The data chose 60.32% of millennials in the age range of 22-28 years looking for property as an investment.

While in the range of 29-35 years, almost 75% view property as an investment. This is only an illustration, if diverting investment from the people of Indonesia is not only focused, only financial assets. So, does this have a bad impact on the banking industry in Indonesia?

Based on a survey of Bank Indonesia (BI) in the second year of 2018, asking for profitable property to reach 1, 98% YoY. This value is greater than the new year rate which is only 1, 92% YoY. At this time the style of home ownership is not only a place to live, but also capital.

Based on the survey team, Business Intelligent Rumah123, millennials in big cities position themselves like investors when buying a house. Information sorts 60, 32% of millennial visitors in the 22-28 age range who look for property like capital.