Print this article

Indonesia Deserves More Investor Love - Alquity

Tom Burroughes

25 February 2019

, the boutique asset manager with about $350 million, has boosted its weightings of Indonesian assets because it sees the Southeast Asian country as being unjustly shunned by investors who have not paid attention to government reforms.

The reform programme of president Joko “Jokowi” Widodo, improving bureaucracy, boosting the infrastructure and the ease of doing business, bodes well for the country’s growth prospects, Mike Sell, the firm’s head of Asian investments, said in a note. Reforms could lift Indonesia’s potential gross domestic product growth rate in the medium- to long-term, from the current 5-5.5 per cent range, and drive GDP per capita towards the level of countries such as Thailand and Malaysia, Sell said.

“Reforms by President Jokowi’s government have already improved the country’s growth prospects. This has not been appreciated by markets, which is also proven by the fact that investors’ aggregate exposure to Indonesia is at historical lows. The re-election of Jokowi should result in capital flows targeting Indonesia again,” Sell said. 

“Consequently, we are of the view that the Indonesian market offers an attractive entry point from a risk-reward aspect, since there are some excellent companies, who sustainably benefit from the country’s structural domestic growth momentum. Such stories can be found in industries such as cement, consumer or financials. We have already increased the weighting across our funds and expect to continue to do so,” Sell continued. 

Alquity focuses on sustainable investing in emerging markets. It steers at least 10 per cent of revenues to the Alquity Transforming Lives Foundation, which awards grants to local projects making a positive social impact in the regions in which it invests.