For those who are interested with Indonesian market:
Indonesia: Still Cheap To Buy? KEY POINTS:
1. Despite the lingering worries on the weakening rupiah at this moment, foreign investors’ buying interest seems to be recovering as net inflow of foreign funds have surged since the beginning of this year.
2. Based on Bloomberg consensus estimates, earnings growth for Indonesian equity market is expected to grow stronger than last year, driven by better earnings in infrastructure, utilities, transportation, consumer goods sectors.
3. Earnings for basic industrial, chemical, mining and agriculture sectors should also see strong improvement in this year.
4. Examining the valuations of the JCI and its sub-sectors suggests that most of the sectors are now fairly priced or overvalued, except for the construction, property, real estate sector and agriculture sector.
5. Currently, the JCI trades at price-to-earnings (P/E) ratios of 15.7X and 13.7X based on 2013 and 2014 estimated earnings respectively, which are close to its fair P/E ratio of 15.0X.
6. We urge medium- to long-term investors of the Indonesian equity market to exercise caution as we believe that the downside risk for the Indonesian equity market has risen.
7. Profit taking activities are likely to take place when uncertainties over the developed markets subside and global recovery becomes more solid.
8. We believe that the possibility of higher-than-expected inflation and a weakening of the rupiah could still be threats
9. We maintain a rating of 2.5 stars “
Neutral” for the Indonesian equity market.
URL:
http://www.fundsupermart.com.my/main/resea...?articleNo=3236