Indonesia Features Highest Return On Equity

Watch the video with Andrew Stotz or read a summary of the country profile on Indonesia.

Four Pillars of GDP: Driven by private consumption

Overall, Indonesia is seeing positive growth, and all pillars are contributing to GDP growth.

Like most economies, Indonesia’s economy is mainly driven by private consumption and investment. Net exports offer almost nothing to GDP expansion. Private consumption contribution rose to 3.46% from 2.4% in the second quarter of 2016.

Indonesia – Highest ROE in Asia

Analysts expect Indonesia to deliver the highest ROE in Asia in 2017 at 16.1%. This is reflected in 2017’s price-to-book being the second most expensive in Asia. Only India trades at a higher PB.

Indonesia Return On Equity

A. Stotz Four Elements: Indonesia’s rank relative to Asia

Overall, Indonesia is the third most attractive in Asia considering all our four elements: Fundamentals, Valuation, Momentum and Risk.

Fundamentals: Indonesia has the best ROE in Asia with 2017 consensus estimates of 16.1%.

Valuation: The nation is moderately attractive, as multiples are supported by fundamentals.

Momentum: Indonesia has moderate price and earnings momentum.

Risk: Indonesia has the most volatile stock market in Asia.

Strong performance in Materials and Energy

Top 3 largest sectors: Consumer Staples: 26% of the market. Financials: 25%. Consumer Discretionary: 12%.

Best sector & stock: Energy: +33.4% & Bumi Resources: +335.3%

Worst sector & stock: Telecom: -6.7% & XL Axiata: -17.7%

This article first appeared on Become A Better Investor