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Citi now believes the Indonesian market boom has run its course for the time being and that this interesting frontier market is fully valued -- or even a little overvalued -- at the moment. The bank's Asia analysts currently expect Jakarta stocks to push up as much as 6.5% from here on purely technical factors over the next 3 to 6 months before sinking back to around 2% lower than where the market is today.

This would reflect current valuations of around 14 times earnings for Indonesian stocks. Of course, if the market evolves along non-historical lines -- if, for example, investors continue to discover Jakarta and push P/E ratios above the norms -- there could still be upside ahead. But for now, it may be time for short-term traders to ease off on Indonesia for awhile. After all, the local ETF is up 38% so far this year.

In the long term -- over the next two years -- Citi still expects Indonesia to outperform on the model of Brazil's recent rally, possibly generating returns of 70% to 90%.

Indonesia is the biggest economy in Southeast Asia (much bigger than Thailand, bigger than Malaysia and Singapore put together) and growing at an annualized rate of about 6%.

In general, you can tell a company is Indonesian from the prefix "PT." The biggest Jakarta-listed stocks you can trade over here are Indonesia Telecom (NYSE:TLK), and Indosat (IIT).

Smaller ADRs that trade fairly often include: Astra International (PTAIF), Bank Mandiri (PPERY), Bumi Resources (PBMRF), Indofood (PIFMY) Semen Gresik (PSGTY), Tri Polyta (PTPIY), United Tractors (PUTKY).

Disclosure: No position

Source: Despite Long Term Promise, Time to Take Profits on Indonesia?