Indonesia may still be a mysterious country for many investors, it has many fundamentals in favor of its exchange traded fund (ETF), and the country has more to offer than meets the eye.
Stocks in Jakarta are up 45% this year, and the related ETF is up 78% since its January inception. Although the health of the Indonesian economy did little to shield itself from the global credit meltdown, there are a few basic fundamentals that keep Indonesia interesting: a reform minded government, an upwardly mobile population, a healthy banking system, and a resource-rich economy, according to Mohammed Hadi for The Wall Street Journal.
A few other factors to consider before an investment in Indonesia:
- Moody’s may raise the country’s debt rating, keeping the country at “junk” status. Weak government and high debt plague the country.
- A presidential election next month may spark instability as incumbent Susilo Bambang Yudhoyono may be re-elected.
- Reformation is coming along and transparency is improving.
- The raw materials in the country can benefit the economy as commodity prices rise.
- The wealth of the nation’s citizens is rising, and multinationals are already prospecting.
- Market Vectors Indonesia ETF (IDX): up 53.2% over three months
For more stories on Indonesia, visit our Indonesia category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.