Indonesia Fund (IF): ‘Hidden gem’
"Indonesia, a long time favorite, is often overlooked by even savvy global investors," says Carl Delfeld. In Chartwell ETF Advisor he calls Indonesia Fund (NYSE: IF) a "hidden gem."
"This year, Indonesia is one of the best performers in the world with a growth rate just a bit behind China. Other attributes are its rich natural resources, less reliance on exports relative to its neighbors, and its growing consumer class which fuels 65% of GDP.
"Other positives are its appreciating currency and strong banks. Jakarta’s banks are among Asia’s best-capitalized banks. Then there is political stability.
"Susilo Bambang Yudhoyono, re-elected last month as Indonesia’s president, expects faster growth next year and a narrowing of the country’s budget deficit alongside a likely increase in inflation.
"Indonesia has been less affected by the global slowdown than many thanks to relatively sturdy domestic consumption, due in part to spending associated with this year’s legislative and presidential elections, and a lower dependence on exports.
"The finance ministry has projected south-east Asia’s largest economy to grow by 4.3 per cent this year. The resilience of the economy helped Mr Yudhoyono cruise to victory with 60.8 per cent of the vote.
"In his 2010 budget announcement, the president said the government was targeting growth of 5% in 2010. Next year’s deficit is to be financed via government bonds and foreign loans from the World Bank, Asian Development Bank, International Development Bank, the president said.
"Following the announcement to parliament, finance minister Sri Mulyani Indrawati said oil production will rise further to 1.01m by 2014. She forecast economic growth would increase further to 6.2 per cent in 2011, rising steadily to 7.2 per cent in 2014.
"My only concern about the Indonesia Fund at this point is valuations that have come up sharply with the market this year. As a result, we would recommend buying on any sharp dips."
Editor's note: Global expert Carl Delfeld's new book -- Red, White & Bold -- is now available. Steve Forbes says, "Carl's perspective is truly unique and insightful in understanding the global economy."
Comments
Leave a Reply