(Bloomberg) -- Indonesia’s benchmark Jakarta Composite Index is set to fall as much as 15 percent in May as the prospect of higher U.S. interest rates unravels the carry trade that spurred inflows to higher-yielding emerging-market assets, according to PT Danareksa Investment Management. “It will be a short-term correction,” said Aldo Perkasa, who helps manage $739 million in assets at Danareksa in Jakarta, the nation’s third-biggest state-run mutual fund company. “People will look at our market’s valuation again.”The Jakarta Composite has gained 84 percent this year to 2,522.55, the best performer among Asia’s 10 biggest stock markets. The rally has pushed up valuations of the 395 companies in the measure to 30 times earnings, from 8.3 times at the start of the year. The rupiah has rallied 15 percent against the dollar in 2009, the most among the 10 major Asian currencies.
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