BETWEEN LIQUIDITY AND INDUSTRIAL MANUFACTURING

In the stock trading at the Indonesia Stock Exchange, Friday (22 / 1), Composite Stock Price Index closed down 28 points or 1.06 per cent to 2610 levels.
LQ-45 index weakened 6.46 points, or 1.25 percent to 511.94 and Kompas100 Index fell 7.4 points, or 1.16 percent to 629.68 level.
The third decline in major stock indexes in IDX is a continuation of the decline in stocks the previous day.

Last Thursday, JCI, LQ-45 index, and Kompas100 Index also declined about 1 percent.

In line with the conditions in the stock market, the trading in financial markets, the rupiah also closed weaker. If last Thursday the rupiah was trading at the level of USD 9300 per dollar, As, yesterday's dollar in the price of Rp 9340 per U.S. dollar.
The decline in the index of general trading floor caused by investor fears of a tightening global liquidity, especially in China and the United States.
Concern that encourages investors to sell since the beginning of the first session of trading on the open. Sell it even got hit in the stock price index fell more in the country, such as the JCI that had touched the 2580 level or down to 2.1 percent.

Foreign investors, who continue to take action before buying, since Thursday and then began to sell in massive.
IDX data recorded, Thursday and foreign investors sell stocks and buy 1.29 billion shares USD 835 billion, so there are net sales of Rp 458 billion.

In trading yesterday, the action continued selling by foreign investors, even more powerful. Data show, foreign investors only make purchases of shares amounting to Rp 797 billion. While the sale of shares by foreign investors reached Rp 1.81 trillion, so there are net sales of USD 1 trillion more.
The weakening of the stock price index in the country during the last two days is in line with the correction that occurred in regional and global markets.
Yesterday, the index of all the regional exchanges recorded weakened. Sharpest decline occurred in the stock of South Korea and Taiwan, each of which weakened 2.19 percent and 2.47 percent. While the shares trade on the New York Stock Exchange, Thursday local time, Dow Jones Industrial Average fell by 2 percent.

BNI Securities analyst Muhammad Alfatih, say, the weakening stock price index at the regional and global restrictions caused by fear of liquidity in China after the local government to raise Giro Minimal local banks.

To worry that, go Alfatih, increased on Thursday when U.S. President Barack Obama prohibit U.S. banks to invest in the funds management business (hedge funds) and private stocks.
Prohibition was in Obama conveyed to reduce risk and prevent the recurrence of economic crisis. In addition, Obama also said it would limit the size or scale of a bank in the U.S..

If the tightening of liquidity really happening in China and the U.S., said Alfatih, the flow of funds into the capital market will shrink and investors tend to move the portfolio from the stock market into fixed income, like bonds and deposits.
It happened because the tightening of liquidity will usually follow that with an increase in interest rates. "By holding the cash first, while these investors feel more secure as seeing the development of liquidity in China and the U.S.," said Alfatih.

Head of Research Paramitra Alfa Sekuritas Pardomuan Sihombing added, correction occurs in the pure domestic stock affected regional market conditions and the deteriorating global.
According to him, piercing the problem through ATM customer's money does not give effect to the decrease in stock index. However, Pardomuan reminded, the problem could have been break-ins that will affect the sector shares in national banks, if not immediately at the finish.

Meanwhile, as manufacturing industries based on natural resources have a great chance to win the market in China China Free Trade Agreement or CAFTA-ASEAN. In addition to increasing foreign exchange, the industry has absorbed a lot of manpower and increase the income of the community.
This was revealed in the discussions held at the Bogor Institute of Agriculture with the theme "The impact of CAFTA on Agricultural Indonesia 2010" in Bogor, Friday (22 / 1).

The speaker, professor of economics and agricultural industries Endang Gumira IPB Said, Chairman, Department of Economics IPB Dedi Budiman Hakim, and international trade experts Oktaviani IPB Rina.
Gumira revealed that the industry should be increased in connection with CAFTA is processing oil palm products, cocoa, coffee, paper and pulp, as well as rubber and rattan.

Fishing industry also has opportunities from Indonesia managed to push illegal fishing and processing fish catches in the country, "said Gumira.
To build a resource-based manufacturing industry nationally, required a large investment. Support transportation infrastructure, ratai supply, and electricity should also be provided.
Gumira reveals, since 2004 until November 2009, Indonesia has consistently experienced trade deficits with China.
Largest deficit 7.2 billion occurred in 2008. At that time China's exports to Indonesia rose 652 percent, whereas Indonesia only 265 percent.
Dedi Budiman revealed, the true liberalization of some agricultural commodities have started to happen since the entry of the International Monetary Fund (IMF) to Indonesia.

Meanwhile, Rice said, in the face of CAFTA, Indonesia faces the challenge of improving competitiveness, not just rely on comparative advantage.
Strategy by improving the investment climate in the country and strengthen the international market intelligence capabilities to analyze the commodity outside negeri.Juga consumer interest needed a quick supply response degan efficient supply chain management to meet the customer's desires according to quality, time, price, and the number of appropriate.

According to the existing analysis, efforts to withdraw from the ASEAN Free Trade Agreement, China or apply a very small barrier nontarif unlikely.
If you pull away, it would be bad, except for Indonesia could provide a scientific argument that can be accepted.