President Trump's protectionist sabre-rattling has unnerved emerging-market investors. Developing countries tend to be more trade-dependent than the industrialised world, so trade barriers would hurt them more. This is why investors are increasingly eyeing up emerging markets with large domestic economies that shield them from the turbulence, says Assif Shameen in Barron's.
Enter Indonesia, where exports account for only a fifth of overall output, and a 250-million-strong population underpins a large domestic market. More broadly, "there's a sense it's all coming together", as Centennnial Asia's Manu Bhaskaran told Barron's. President Joko Widodo has made slow but steady progress on structural reforms since his election in 2014.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The current macroeconomic backdrop also looks positive, with inflation under control at 3% and credit growth set to expand by 10%-12% this year; that will bolster consumption and help GDP expand by around 5.4% this year. The prices of some of Indonesia's key commodity exports, such as coal and palm oil, have risen of late.
The long-term fundamentals "look incredibly compelling too", says Mark Cudmore on Bloomberg.com. Indonesia has "superb demographics": less than 9% of the population is older than 65. So there is scope for current growth rates to endure for years. The Aberdeen Indonesia Fund (NYSE: IF) is on a 15% discount to net asset value.
-
Steve Webb: The triple lock is there to do a job. I’m not embarrassed or ashamed of itThe triple lock means 13 million pensioners will now get an above-inflation state pension boost in April. While the rising cost of the policy has stirred controversy, Steve Webb, who served as pensions minister when it was introduced, argues the triple lock is vital and should stay. Webb speaks to Kalpana Fitzpatrick on the new episode of MoneyWeek Talks – out now.
-
How retirement pots risk running out 11 years early if inflation remains highPension savers could find their retirement income may not last as long as they anticipated over fears that inflation may not slow down
