Indonesian Stocks to Watch

Investing in Indonesian stock market

When it comes to stock trading, it is very easy to get overwhelmed by the sheer number of investment options. This number is further compounded when it comes international stock trading. Not only do you have to choose between different markets in the world over, but you also need to consider which companies in the market are best aligned with your trading goals. The impossible number of investment opportunities may leave you, as a new trader, at a loss as to where to begin on this path of investment diversification. However, if you are looking to diversify your income through international stock trading and make good returns in future, one international market that is definitely worth your consideration is the Indonesian stock market.

The Indonesia market is blooming market propelled by a rise of the middle class, whose increased domestic consumption is steadily pushing the country’s growth in all sectors. It is not by chance that it has been ranked as the fastest growing market in the ASEAN (Association of Southeast Asian Nations) region, blazing the trail for other countries in the region, including Malaysia, Singapore and Thailand. The market was shown to be giving veteran trading countries, such as China, a run for their money when they became one of the three G20 countries that realised a growth in 2009 – a year during which there was global economic slump.

But what factors make this market such good one to buy into?

While volatile trading policies with market giants such as the United States, and rising tensions in the Middle East are some of the factors that may serve to trip up the bulling Indonesian market, everything from the steady economic growth spurred on by the consuming middle class, to a stable rupiah currency and country’s fiscal fastness have been cited as factors that are sure to keep Indonesia’s capital market on an upward trend, as investors flock in to invest on the lucrative securities exchange market. These positives are generally expected to override the negatives that would otherwise hold the country back. That added to the numerous investment opportunities in agribusiness, mining, palm oil processing and other manufacturing activities, and a large potential customer base, it is clear as to why this country had achieved a market capitalisation of more than USD 500 billion by 2017.

However, since the Indonesia Stock Exchange has almost 570 listed companies, most of which are, by all standards, good buys, it can be very difficult for any trader to settle on a few that are worth their buck, due to the overwhelming number of options. Therefore, instead of looking at the market as whole, it might be easier to find something more suited to your needs by breaking them down to bite size industrial sectors.

Banks are generally a great place to start in many markets and the Indonesia Stock Exchange is no exception. Banks have dominated the list of leading stocks to buy in Indonesia. These include Bank Central Asia, Bank Mandiri and Bank Rakyat Indonesia, whose shares have hit highs of more than 20,000 rupiah per share for the Bank Central Asia, for example. The telecommunication industry as well, is represented on the list of trailblazers by Telecomunikasi Indonesia, which serves as the main telecommunication company in the country. Unilever Indonesia represents the home and personal care sector while the manufacturing and processing industry is lead mainly by palm oil refineries. Palm oil refining and processing has always been of the driving industries in Indonesia, together with coal mining, petroleum oil and gas processing. This thanks to the abundance of diverse natural resources in the country which allow for commodity exports to countries such as China, United States, Malaysia and Korea.

These are just a few of the many options that make the Indonesian stock market one of the best investment opportunities when it comes to international stock trading. Together with the Philippine Stock Exchange Inc, Singapore Exchange, the Stock Exchange of Thailand among others, they form the Association of Southeast Asian Nations (ASEAN) Exchange and this collaboration has allowed for synergistic economic and capital market growth in the region, as cross border investments increase. With so many companies listed from such a plethora of sectors, one can be sure to find a company that lines up with their trading style and goals in Indonesia.

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