Indonesia, Another Hot Emerging Market

If you haven’t invest in the Jakarta (Indonesia) stock market, you are missing one of potentially great growth story of the emerging market outside China and India. From July 31st 2002 to July 31st 2007, JCI (Jakarta Stock Index) significantly outperformed DJIA (Dow Jones Industrial Average), 482.5% vs 69.24% (source Bloomberg). Yet, with such a great past 5-year story, JCI’s PEG ratio is currently still below 1, while the P/E ratio is hovering around 14 to 16 (based on 2008 EPS projection). The 3 year earnings growth outlook remain attractive at 25% to 30%. And, with the Presidential and House election coming up in 2009, you can be sure the government will try their best to boost the economy, and hence, should be good for the equity market. Buy Indonesian equities!

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