Jahanzeb Naseer and Bernard Kie, analysts at Credit Suisse Groupe AG, argue that consumer staples companies will benefit from President Joko Widodo’s social programs.
EIDO has a 12.0% position in consumer staples and IDX has a 16.4% weight in consumer staples. Financial stocks make up the largest component in both ETFs at 36.5% of EIDO and 32.4% of IDX.
The change to fuel subsidies “is encouraging since it suggests that (Widodo) is serious about economic reform in Indonesia, and is even prepared to take steps that may prove unpopular in the short run,” Gareth Leather of Capital Economics said in a Today Online article.
iShares MSCI Indonesia ETF
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Max Chen contributed to this article.