Often overshadowed by the Chinese and Indian giants, the 5 satellite countries do not enjoy due attention. South Korea, Taiwan, Malaysia, the Philippines and Indonesia they are economic forces whose importance can no longer be hidden and which must be kept an eye on.
Il GDP of Indonesia in 2011 grew by 6,5% and for 2012 an increase of the same amount is estimated. Driving the economy are the private consumption, with an exponentially growing middle class and more than half of the population under 30. The exports of traditional commodities (minerals, palm oil and rubber) drive the country: exports are increased 19% compared to 2010. The two main partners are the two giants: exports to China increased by 53,4% and to India by 34,8%. While inflation remains a major problem, it hit an almost 2-year low in February, up 3,56%.
These are all consequences of prudent management of public finances (limited fiscal deficit and an increase to 30% of the ratio between fixed investments and GDP per year) and of a sensible central bank policy. It is no coincidence that last month Moody's has upgraded the country's sovereign debt rating. Foreign capital in Indonesia is a large part of the total, which as in South Korea, scares the local authorities, intimidated by a withdrawal of capital in times of crisis or following a further cut in interest rates that could be required by the global slowdown.
According to an interesting analysis by Bluerating investing in this country could be "statistically more defensive" than the generic MSCI Emerging Market index and the other two major emerging Asians, South Korea and Malaysia. In fact, a linear regression over a seven-year period (considering weekly historical series) shows that the Indonesian market has a Beta of 0,6 against 0,7 for the South Korean Kospi and 0,85 for the Malaysian Stock Exchange.
In one year, the DB X-Trackers MSCI Indonesia Trni ETF gained 14,13%.
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