Why Indonesian companies are getting some love from analysts

26 September 2018  |  NEWS

For a few years now, Indonesia has been stoking the interest of investors. As far back as 2016, analysts were making predictions about the country becoming the next Asian powerhouse. For example, many believe that by 2020, Indonesia will have the third-highest e-commerce numbers, with estimates set at $130 billion, thanks to an annual growth rate of 50%. These statistics are driven by Indonesia’s approach to online marketing and mobile-first thinking.

In 2015, 70% of Indonesians on the web were using their phones for access. Back then, the figure was projected to reach 99% by 2018. Also, for many Indonesians – especially in rural areas, their smartphones are their only internet source. In 2015, Indonesia had 63 million active Facebook users, making it the largest national block in the world.

At the same time, rural users are cut off from many products and services because of their remote location. These users largely source their requirements via online shopping. These combined factors mean Indonesian developers don’t operate like their compatriots around the world. In other nations, platforms are created for desktop use then re-tooled for mobile.


This is beginning to change as mobile phones outpace PCs, but in Indonesia, the mobile-first approach is organically entrenched. It’s their natural pattern of development, which means their e-products work much better. And since the mobile space has so much growth opportunity, Indonesia has become a promising commercial centre.

In 2015, some Indonesian e-commerce start-ups raised millions using virtual crowdfunding methods. In the past few months, Indonesia’s attention has ramped up, thanks to its JCI (Jakarta Composite Index) rallying for the first time since January 2018. That monthly gain nudged  offshore stock trading, garnering foreign interest and increasing stock purchases by 75%, with a stock valuation of $54 million.

It’s the highest gain since 2008, even though the five-year JCI earnings average valuation is 14.8 and the current is only 14.5. The JCI has 597 members. As of September 2018, 164 of them had at least one recommendation from Bloomberg. Companies that received unanimous endorsements include PT Sri Rejeki Isman, a textile company. PT Medco Energi International and PT Timah got good ratings too. They’re both from the mining sector.

Stronger local currency

Another helpful factor is the settling of the rupiah, Indonesia’s currency. Top RHB Securities analyst Andrew Wijaya weighs in. He says investors see the value of Indonesian stocks, and that local residents will soon benefit as well. The government has promised to raise subsidies on electricity and fuel, which will allow citizens and residents to expand their spending power, putting more cash in the market and boosting the economy even more.

One Indonesian company gathering a lot of attention is PT XL Axiata. It’s a Telkom company currently being watched by more than 32 analysts, and 31 of them recommended it as a good buy. With all these developments, investing in Indonesia is a smart option, and Monex can help you get started in 12 different international markets – including Indonesia – at extremely competitive brokerage rates.

To learn more about Asian markets and start investing for yourself fill out our Monex contact form and we’ll get right back to you.

Read Also:

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U.S. Stock Market – 5 Companies to Watch

Which Asian markets should be on your radar?

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