Indonesia: Asia-Pacific’s Best-Performing Market This Year

•••••
Facebook
Twitter
LinkedIn
Jakarta Stock Exchange
Indonesia Stock Exchange Photo by Ruben Sukatendel on Unsplash.

Abigail Ng, reporting for CNBC’s Asia Markets, has written that Indonesia’s Jakarta Composite index may have faced a couple of bumps in the road in 2022, but as of Monday’s close, it was the best-performing major Asia-Pacific index for the year.

The index is up 6.51-percent since the start of the year.

In contrast, the Hang Seng index in Hong Kong, South Korea’s Kospi, and Taiwan’s Taiex have plunged more than 25-percent this year.

Mainland China’s Shanghai Composite and Shenzhen Component have also been hammered, slumping by nearly 17-percent and 27-percent respectively.

The Nikkei 225 in Japan, India’s Nifty 50 and the SET index in Thailand fared a little better, notching single digit losses.

Singapore’s Straits Times index was the second-best performer in the region, falling just 0.53%.

The Jakarta Composite index fell sharply in May and July before playing catch-up, and has stayed above the 7,000-level since early August.

Foreign investment into stocks has driven the index higher, and Indonesia is benefiting from higher commodity prices, according to Maynard Arif, head of Indonesia equities at DBS Group Research. The Southeast Asian country is a commodity exporter.

Economic recovery there has been on the uptrend after Covid restrictions were lifted, though developed economies experienced this boost earlier on, he added.

“2022 earnings growth on [the] Indonesia market remain robust, even after a big recovery in 2021 from a low base,” Maynard told CNBC in an email.

He added that DBS remains optimistic on Indonesia, though it faces headwinds from interest rate hikes from the U.S. Federal Reserve and a strong dollar, which have led to outflows for government bonds this year.

“The valuation may look expensive [compared with] other countries but it can be justified given Indonesia’s outlook and growth,” he said.

However, falling commodity prices are a source of uncertainty for Indonesia, said Manishi Raychaudhuri, BNP Paribas’ head of Asia-Pacific equity research.

“Given the decline in energy prices … we advise caution and a nimble-footed approach to the energy sector in particular, and to Indonesia in general,” he wrote in a report dated September 28.

Elsewhere in Southeast Asia, Singapore has a “large representation” of companies, such as banks, that benefit from rising yields, said Raychaudhuri, adding that the country and India, Indonesia and Malaysia are “pockets of safety.”

Suresh Tantia, a senior investment strategist at Credit Suisse, said tourist inflows are supporting the economy and the market after it reopened.

Tantia also said Credit Suisse prefers South Asia to North Asia markets for now, given the export-reliant nature of markets such as South Korea, Taiwan and China.

“South Korea and Taiwan, definitely we could see some more pressure, export growth slowdown, currencies remain weak and we are seeing weakening demand for chip sector also, which is very important for these two markets,” he told CNBC.

Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs, said there are three positive drivers for Southeast Asian markets.

Those include their delayed recovery from Covid, the emergence of a digital or “new” economy, and rising interest rates.

“ASEAN markets typically have a very high exposure to banks, and banks were not the place to be the last 10-years,” he told CNBC’s “Street Signs Asia” on Tuesday. “But they are now, with the interest rate cycle turning, and so that’s been a very significant tailwind for the ASEAN markets.”

Taiwan has a lot of exposure to the slowing global economy and also experienced heightened geopolitical tensions with China.

The percentage of foreign ownership of South Korea stocks, meanwhile, is at decade lows, he added. But that may mean the country is a good candidate for investment within North Asia, Moe added.

He pointed out that South Korea doesn’t have as significant geopolitical concerns as neighboring economies and that its currency has sold off this year.

Source: CNBC Asia Markets

Table of Contents

Related Post

Investing Using A Nominee Agreement: Is It Still Relevant?
Indonesia's Property Sector is Safe Say Savills
Indonesia's Property Sector is Safe Say Savills
Now Is A Good Time To Invest in Indonesia Says BI Governor
Now Is A Good Time To Invest in Indonesia Says BI Governor

Popular Tags

To maintain our professional standard, we have established strong presence in the center of Jakarta and Bali to serve you better. Visit us at :

Jakarta
Noble House, 9th floor unit 2B
Jl. Dr. Anak Agung Gde Agung, Kav E.4.2 no. 2
South Jakarta – 12950

Bali
Jl. Sunset Road No. 777
Seminyak, Bali – 80361 “

We’re committed to being accessible. Find our offices in Jakarta and Bali, staffed with local experts who understand your unique needs. Also we extend our reach with our collaborative partners.
Seven Stones Indonesia
Jl. Sunset Road No.777, Seminyak, Kec. Kuta, Kabupaten Badung, Bali 80361
Seven Stones Indonesia Jakarta
Noble House, 9th Floor, Jl. Mega Kuningan Barat, RT.5/RW.2, Kuningan, Jakarta 12950
Monday Co-Working
Jl. Toya Ning II, Ungasan, Kec. Kuta Sel., Kabupaten Badung, Bali 80361
B Work Bali
Jl. Nelayan No.9C, Canggu, Kec. Kuta Utara, Kabupaten Badung, Bali 80361
Show Places
Seven Stones Indonesia
Jl. Sunset Road No.777, Seminyak, Kec. Kuta, Kabupaten Badung, Bali 80361
Open in Google Map
Seven Stones Indonesia Jakarta
Noble House, 9th Floor, Jl. Mega Kuningan Barat, RT.5/RW.2, Kuningan, Jakarta 12950
Open in Google Map
Monday Co-Working
Jl. Toya Ning II, Ungasan, Kec. Kuta Sel., Kabupaten Badung, Bali 80361
Open in Google Map
B Work Bali
Jl. Nelayan No.9C, Canggu, Kec. Kuta Utara, Kabupaten Badung, Bali 80361
Open in Google Map
×

Geocoding Error Occured.

Tried to Geocode:

Error Type:

Please be sure to follow the tutorial on how to setup the Google APIs required for the Advanced Google Map Widget.

Google Map API Key Tutorial
Please enable JavaScript in your browser to complete this form.
Name

Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.