Compounding the potential woes investors face with Indonesia, the world’s fourth-largest country by population, is that equities there may not be much better than bonds. Earlier this week, Morgan Stanley downgraded Indonesia to underweight from equalweight. Prior to that PT CIMB Securities Indonesia cut its recommendation on stocks there, citing the possibility that higher fuel prices may stoke inflation, reports Harry Suhartono for Bloomberg.
On top of all that, the World Bank recently pared its outlook for Indonesian GDP growth this year to 5.9% and Morgan Stanley called Indonesia the Association of Southeast Asian Nations (ASEAN) most vulnerable equity market. Vulnerable indeed as EIDO and IDX reside an average of 6% below their 200 day moving averages.
Market Vectors Indonesia Index ETF
ETF Trends editorial team contributed to this report.