December 3, 2022

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Indonesia is the best performer

2 min read

Morning rush hour in Jakarta. Indonesia’s Jakarta Composite index faced a couple of bumps in the road in 2022, but as of Friday’s close, it was the best performing major Asia-Pacific index for the year.

Bay Ismoyo | AFP| Getty Images

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% 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% this year.

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

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

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

Indonesia’s advantage

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.

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

Maynard Arif

Head of Indonesia equities, DBS Group Research

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…

2022-10-03 23:15:00

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