Skip to main content

Buy More Indonesian Shares, Goldman Sachs Says

Sept 20, 2012


Goldman Sachs Group raised its recommendation on Indonesian stocks, citing the Southeast Asian nation’s fundamentals, easing policy concerns and its lagging performance to other regional markets. 

“We are positive on Indonesia’s long-term growth potential — demographic trends, urbanization, capital formation, financial deepening — and we see its underperformance against its Southeast Asian peers as an attractive opportunity to re-engage,” said a group of Goldman analysts led by Timothy Moe, in a report released in Jakarta on Wednesday. 

The US investment bank lifted its rating to overweight from marketweight, meaning it suggests that investors own more shares in Indonesia than what is currently allocated in a model investment portfolio. 

The MSCI Index for Indonesia has risen 2.7 percent so far this year, lagging the 16 percent gain of the Asean index this year in dollar-denomination terms. 

Goldman says it favors Indonesian policy makers’ efforts to address the issues of excess domestic demand and rising current-account deficit by maintaining a stable rupiah and tightening consumer credit facilities. “We believe government actions will help extend the cycle and reduce unnecessary macro volatility,” Goldman said in the report. 

In terms of corporate earnings growth Goldman said that Indonesia has built a solid record of delivering “mid-teens” earnings growth, an average of 16 percent from 2010 to this year’s forecast. It has also high return on equity at 26 percent in the past three years, “matching the strong underlying economic growth.” Goldman predicts the economy growing 6 percent this year, slowing from last year’s 6.5 percent expansion but faster than many other Asian economies. 

In other markets it upgraded South Korean and Indian stocks while reducing Australian and Malaysian equities.


For detail story visit here

Comments

  1. Hello there! I know this is κinda off topic hοωever ӏ'd figured I'd ask.
    Would you bе interestеd in tгading lіnkѕ or maybе
    guest authoгіng a blog artiсlе
    or vice-ѵеrѕa? My site dіѕcuѕses a
    lot οf the ѕаme subjеcts аѕ уouгs anԁ I think wе
    cοulԁ grеatly benefit from еach otheг.
    If уou are intеrеsted feel fгee to ѕhoot me аn emaіl.
    ӏ loοk forwarԁ to hearing fгom
    уou! Wonderful blog by the way!
    Also visit my page ... Terry Sawyer

    ReplyDelete

Post a Comment

Popular posts from this blog

Indonesia's Astra Pins Hopes on Inexpensive Cars

From Wall Street Journal Feb 14, 2013 PT Astra International plans to continue dominating Indonesia's booming car and motorcycle markets by spending billions of dollars on expansion and becoming the first auto maker to sell a car priced to reach the country's emerging middle class. Astra controls 54% of the passenger-car market through joint ventures with Japan's Toyota Motor Corp., Daihatsu Motor Co. and Isuzu Motor Ltd., and holds 58% of the motorcycle-and-scooter market through a joint venture with Honda Motor Co.  To expand the pool of Indonesians who can afford a car, Astra plans next quarter to introduce models with sticker prices as low as $8,000 through its joint ventures with Toyota and Daihatsu. Currently, the least-expensive passenger cars in Indonesia sell for at least $12,000. "We will be the first offering affordable vehicles," he said. "This year, [auto-sales growth] should at the very least be flat, provided this ne

Goverment to Build New Port in Subang or Indramayu

From The Jakarta Post April 2, 2015 The government has changed its plan to build a new port in Cilamaya and is seeking a better location in Subang or Indramayu, West Java. Vice President Jusuf Kalla said the government needed to build a new port but it would not be in Cilamaya. The Vice President, who visited Cilamaya with several ministers, including Coordinating Maritime Affairs Minister Indroyono Susilo and Transportation Minister Ignasius Jonan on Thursday, said the new port would be built east of Cilamaya, either in Subang or Indramayu. Kalla said the main reason to move the new port’s location to another regency was because waters in the area were already crowded by offshore mining activities and oil tankers transporting crude oil to Jakarta and other cities. The government has allocated Rp 34.5 trillion (US$2.6 billion) to construct a new port, as Tanjung Priok Port is deemed too crowded. For detailed story, visit here The government has changed its plan to build a new p

POSCO to lift Indonesia investment to $11 billion over next 5 years: Jakarta

From Reuters Oct 19, 2012 South Korean steelmaker POSCO will almost double its investment in Indonesia to $11 billion over the next five years, from $6 billion currently, Chief Economics Minister Hatta Rajasa said on Friday. The world's fourth-biggest steelmaker, already has a multi-billion dollar joint venture with Indonesian state-owned PT Krakatau Steel, the country's biggest steel producer. Earlier this year, the South Korean firm's affiliate POSCO Engineering & Construction, formed a consortium to build two 300-megawatt power plants on Indonesia's Sumatra island, worth around $1 billion. A POSCO spokesman in Seoul said the South Korean firm has yet to make detailed investment commitments in Indonesia, and noted other partners would jointly invest in any projects. Foreign direct investment in Indonesia stayed strong in the second quarter, showing the G20 member remained a magnet in a troubled global economy and that changes in mining ownership r