Indonesia stocks seen rising 14.5 pct in 2008 -UBS
JAKARTA, Dec 17 (Reuters) - Indonesia's stock market, the second-best performing market in Asia after China this year, may rise a further 14.5 percent in the next 12 months as the economy expands at its fastest pace in over a decade, UBS said on Monday.
The main risk was high oil prices that could hurt corporate earnings, said UBS head of research Joshua Tanja in Jakarta.
"Next year consumption is the number one story for us," Tanja told a briefing, adding that sectors such as autos, cement, banks and consumer goods should see strong growth.
"The momentum of the economic recovery is getting stronger," he added, saying that its target for the benchmark Indonesia Stock Index .JKSE was 3,050 points in the next 12 months.
The index has gained nearly 48 percent since the start of 2007, making it the second best performer after China in local currency terms. It ended trading on Monday at 2,664.9.
Tanja forecast average earnings growth of the firms covered by UBS should rise 14 percent next year and 15 percent in 2009.
Last month, Manulife Asset Management Indonesia, which manages over 16 trillion rupiah ($1.71 billion), said the index may top 3,300 points by the end of next year.
Rising global commodity prices have attracted interest from international firms which want to invest directly in the resources sector in Southeast Asia's largest economy, as well as fund managers putting money into resource-related stocks.
Indonesia's mining sub-index .JKMING has gained 231 percent since the start of the year, driven by robust increases in mining companies like coal miner Bumi Resources (BUMI.JK).
The government expects the economy to grow 6.3 percent this year and 6.8 percent in 2008, up from 5.5 percent in 2006. (Reporting by Harry Suhartono, Editing by Louise Ireland)
