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.
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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.
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