Profits in the Emerald of the Equator?

Profits  in the Emerald of the Equator?

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

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The date: 2017-11-21, Time: 16:00 Asia/Bangkok

Morningstar Investment Conference: Fund Manager Highlights Personalized Medicine, Energy Security

Clint Carlson Far ViewHedge fund managers go about finding investment ideas in a variety of different ways. Some target stocks with low multiples, while others look for growth names, and still others combine growth and value when looking for ideas. Some active fund managers use themes to look for ideas, and Owen Fitzpatrick of Aristotle Atlantic Partners is Read More

Four Pillars of GDP: Driven by private consumption

Indonesia’s GDP has been growing at a rapid pace, 5% over the past year. Private consumption and investment have been the main contributors to GDP growth, while government consumption has been slightly reduced, despite the government’s big plans for infrastructure and energy investments over the next five years.

Heightened earnings, rich valuations growth expected

Earnings saw a recovery in 2016, but analysts’ estimates for 2017-2018CE* are in the double digits. Return on equity (ROE) is the highest among Asian markets, expected at 16% for 2017, and a price-to-book of 2.8x.

Highest ROE in Asia but rich #valuation for #Indonesia

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

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

Fundamentals: Indonesia has the highest ROE in Asia, hence strong profitability.

Valuation: The strong fundamentals are reflected in the second highest price-to-book in Asia, only India trades at a higher PB.

Momentum: Slow price momentum mixed with decent earnings growth.

Risk: The market’s price volatility compared to other Asian markets is relatively high.

Industrials have seen the largest stock gains in 3Q17

Top 3 largest sectors: Financials: 29% of the market; Consumer Staples: 23%; Consumer Discretionary: 11%.

Best sector & stock: Industrials: +16.9%; PT Totalindo Eka Persada Tbk: +295.7%.

Worst sector & stock: Utilities: -21.7%; PT Perusahaan Gas Negara (Persero) Tbk: -30.8%.


*CE is consensus estimates

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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.

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In 1992 Dr. Andrew Stotz, CFA, left a management career at Pepsi-Cola in California to teach finance in Thailand. In 1993, he found his life calling as a financial analyst, a job for which he was eventually voted #1 in Thailand. In the second half of his 20-year career in investment banking, Dr. Stotz was a Head of Research, leading teams of financial analysts. He served as a two-term president of CFA Society Thailand and now runs his firm, A. Stotz Investment Research, which provides research and tools for institutions and high-net-worth investors and helps CEOs make their companies financially world class.
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