Indonesia Rebound Play

momothebored

Active member
Aug 30, 2012
139
1
28
#1
Hello,

Am curious about what would be the best way to go about this.

Indonesia is being hit badly by a number of macro issues, which has seen the JCI plummet by 40+% and the IDR by 30+% against the USD the last few months.

Momentum is just beginning to show signs of slowing down, perhaps in line with the government intervening to buy back stocks and actions in the currency market.

What would be the best top-down method to single out the best things to buy?

(i) I'd like to buy the firms with moats and sustainable competitive advantages but i don't know the market well at all.

(ii) Off the top of my head i'd say high beta cyclicals would lead the way back up. What sectors typically lead a cyclical recovery? Banks? Property? Anything else?

(iii) Any ideas how to sift through would be greatly welcome.
 

Jack o'Clubs

Well-known member
Sep 7, 2005
1,554
342
93
#2
What platform do you use - that will have some bearing on what options are open, eg a general market ETF might be more realistic than individual stocks. Banks would undoubtedly be the best way of playing a recovery as essentially you want domestic demand rather than, say, commodity exporters. But... I'd be careful about this. Indonesia's FX reserves are low, and yet short-term FX debt relative to GDP has rinse rapidly. I would avoid for now, unless you think US treasuries have risen enough...
 
Likes: timsk