While U.S. equities are being dragged down by a lackluster earnings season and a weakening outlook, Indonesia’s stocks and country-specific exchange traded funds strengthened Friday on an expanding economy.
On Friday, the iShares Indonesia Investable Market Index Fund ETF (NYSEarca: EIDO) gained 2.3% and Market Vectors Indonesia Index ETF (NYSEarca: IDX) rose 2.0%. Both EIDO and IDX are now trading back above their long-term, 200-day simple moving averages.
Indonesia’s markets advanced to a near six-month high Friday on better-than-expected fourth-quarter economic growth results, along with regional indices rising before the Lunar New Year holiday, Reuters reports. The Jakarta Stock Exchange Composite Index will be closed Monday.
The Indonesia economy expanded 5.04% year-over-year in the fourth quarter of 2015, compared to expectations of 4.8% growth, as government spending helped offset weak exports and consumption. The fourth quarter results were also better than third quarter’s growth of 4.74%, as well as the second quarter and first quarter growths of 4.66% and 4.73%, respectively, The Jakarta Post reports.
“In the first to third quarters, the physical effects of infrastructure development had not taken effect,” Central Statistics Agency (BPS) head Suryamin said, adding that local growth from infrastructure spending played a significant role in supporting economic growth.
Government spending on infrastructure helped counter the slowing export industry as China, Indonesia’s largest trading partner, experiences a slowdown in its own economy.