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Business Times
5 days ago
- Business
- Business Times
Indonesian stocks near record high, unfazed by foreign selling
[JAKARTA] Indonesian stocks are closing in on an all-time high as booming domestic demand offsets a deluge of foreign outflows. Foreign investors have sold a net US$3.8 billion in local shares so far this year, on track for their largest annual outflow ever, according to Bloomberg-compiled data. Despite the exodus, the Jakarta Composite Index has rallied 26 per cent from an April low and is approaching its record high set in September. The disconnect between foreign selling and the benchmark's advance highlights Indonesian equities' waning reliance on overseas investors. Local retail participation and demand for stocks linked to billionaires, such as Prajogo Pangestu's Barito Renewables Energy, are supporting the South-east Asian country's shares, outweighing concerns over global trade. 'Domestic investors are backing a new generation of winners,' said Mohit Mirpuri, a fund manager at SGMC Capital. 'If this trend holds, a fresh record high could just be the beginning' for Indonesia's equity gauge. The number of local retail investors has ballooned to 17 million in 2025 from just 3.8 million five years ago, according to the Indonesia Stock Exchange. Meanwhile, foreign ownership in the nation's stocks has shrunk to about 40 per cent, down from more than 57 per cent a decade ago, Indonesia Central Securities Depository data show. A string of successful initial public offerings from companies such as infrastructure firm Chandra Daya Investasi have re-energised local investors, Mirpuri said. Its shares have climbed 837 per cent since their listing last month. He also points to Barito Renewables, whose stock has soared more than 800 per cent since its 2023 debut. Both companies are tied to Pangestu. Falling government bond yields are also prompting domestic investors to seek stocks and other assets offering higher returns, according to analysts. Indonesia's benchmark 10-year yield has declined by more than 50 basis points this year to 6.5 per cent. A softer US dollar, prospects for further interest-rate cuts by Bank Indonesia and greater certainty over global trade could lure foreign investors back, said Rajeev De Mello, global macro portfolio manager at Gama Asset Management. US President Donald Trump's decision to impose a 19 per cent levy on Indonesian imports, down from the 32 per cent rate he initially threatened, has also buoyed sentiment. Still, foreign investors could keep dumping the nation's stocks if corporate earnings disappoint, said Aldo Perkasa, head of research at Trimegah Sekuritas Indonesia. He sees the country's benchmark ending the year at 7,750 points, 3.1 per cent above on Tuesday's close. BLOOMBERG
Business Recorder
24-07-2025
- Business
- Business Recorder
Asian currencies: S Korea's won and Taiwan dollar higher
BENGALURU: Emerging Asian market equities resumed their rally on Wednesday, led by strong gains in Indonesia and the Philippines after the two countries hashed out a deal with the US for tariff rates lower than those threatened earlier. An MSCI index of emerging Asian equities jumped to a more than 3-1/2-year high, rebounding from a slight dip on Tuesday that snapped its three-day win streak. A subset of ASEAN stocks, dominated by Singapore, also jumped nearly 1%. Singapore's Straits Times index extended its rally into its 13th consecutive session - its longest ever - during which it advanced more than 5%. Indonesia's benchmark jumped more than 1%, and headed to its highest closing since mid-December. Stocks in the Philippines jumped 1.7% to mark their best day in a month. US President Donald Trump announced new import duties of 19% for goods from the Philippines, a touch below the rate of 20% he threatened earlier this month. Indonesia agreed to eliminate levies on more than 99% of US goods and scrap barriers to American firms, while the US said it will drop its tariff rate on Indonesian products to 19% from 32%. 'Asian equities are rallying on a cocktail of positives,' said Mohit Mirpuri, an equity fund manager at SGMC Capital. 'Tariff clarity with the United States across multiple fronts, including Japan and the Philippines, is lifting are rotating back into Asia, where valuations look compelling and policy risk is finally easing.' South Korea's KOSPI index advanced 0.4%, while Taiwan's benchmark jumped 1.4%. Vietnam's benchmark was largely flat in the afternoon, after touching a more than three-year high earlier in the day.
New Straits Times
23-07-2025
- Business
- New Straits Times
Tariff deals with US lift Asian stocks; currencies upbeat
NEW YORK: Equities advanced across emerging Asia on Wednesday as investors cheered new US trade deals, with stocks in Indonesia resuming their rally as Southeast Asia's largest economy hammered out tariff arrangements with the United States. The MSCI index of emerging Asian equities jumped 1 per cent to its highest since mid-November 2021, largely driven by a gain of 1 per cent in Taiwan's benchmark index. Thai stocks jumped more than 2 per cent to a two-month high, while equity benchmarks in Indonesia and the Philippines gained as much as 0.7 per cent. US President Donald Trump announced a new tariff of 19 per cent for goods from the Philippines, a touch below the rate of 20 per cent he threatened earlier this month. Indonesia hashed out details of its pact with the United States to eliminate tariffs on more than 99 per cent of US goods and scrap barriers to American firms, while the US will drop its threatened tariff rate on Indonesian products to 19 per cent from 32 per cent. "Asian equities are rallying on a cocktail of positives," said Mohit Mirpuri, equity fund manager at SGMC Capital. "Tariff clarity with the United States across multiple fronts, including Japan and the Philippines, is lifting sentiment," he told Reuters in a text message. Signs of cooling inflation and policy support from China contributed to the risk-on approach across the region, he added. "Investors are rotating back into Asia, where valuations look compelling and policy risk is finally easing." Analysts saw the economic impact of the Philippines tariff rate of 19 per cent as relatively limited. A note of caution was struck by William Bratton, head of APAC cash equity research at BNP Paribas, warning that the rates, though less severe than feared, could prove disruptive for Asian exporters and punitive for earnings in the long term. Earlier, Japan and the United States struck a deal to lower to 15 per cent the tariff on all imported goods from the steep 25 per cent Trump had previously threatened, with Japan also pledging to invest US$550 billion in the US Elsewhere in Southeast Asia, stocks in Singapore gained for a 13th straight session in their longest streak on record. They had traded most of Tuesday in the red but ended slightly higher. Stocks in Kuala Lumpur added 0.3 per cent. Equities in Bangkok were set for their strongest day in almost a week. The appointment of rate-cut advocate Vitai Ratanakorn as governor of the Thai central bank, has boosted investor confidence, though concerns linger on its independence. "His (Vitai's) remarks and public statements suggest a decisive shift towards more aggressive monetary easing and closer coordination with government fiscal policies," analysts at Citi said in a note. Among currencies, South Korea's won and Taiwan's dollar appreciated up to 0.4 per cent, while Indonesia's rupiah , Thai baht, Singapore dollar, and Malaysia's ringgit traded largely unchanged. The MSCI index of global emerging market currencies rose to a two-week peak.
New Straits Times
14-07-2025
- Business
- New Straits Times
Asia equities rally, led by Indonesia and Singapore; currencies muted
SINGAPORE: Equities in emerging Asian markets trended higher on Monday, led by Indonesia, which gained for a sixth straight day, while Singapore's stocks touched a record high for the ninth consecutive session on strong investor inflows. Stocks in Jakarta gained 1.3 per cent to scale their highest since June 18. Index provider MSCI said Barito Renewables , Petrindo Kreasi Jaya and Petrosea would be eligible for future inclusions to its list. The three firms, advancing between 15.7 per cent and 18.6 per cent, are all linked to Indonesian billionaire Prajogo Pangestu, who founded conglomerate Barito Pacific. "Today's push is also helped by clarity from MSCI (that) Barito group stocks are no longer treated as exceptions, making them eligible for future inclusion, which unlocks passive flows," said Mohit Mirpuri, an equity fund manager at SGMC Capital. In Singapore, the benchmark added 0.4 per cent to scale to a fresh peak for the ninth consecutive session, as investors continued to embrace high-return defensive stocks, improving inflow into the local dollar. "Domestic liquidity and market sentiment should also be bolstered by government initiatives aimed at reviving the equity market," said Kenneth Tang, senior portfolio manager at Nikko Asset Management. Broadly, Asian equities slipped on Monday after briefly touching their highest since early 2022 in the previous session. Shares in Taipei fell 0.7 per cent. Currency markets remained on edge but muted in response to fresh tariff threats from US President Donald Trump, who warned of a 30 per cent duty on imports from the European Union and Mexico. The Mexican peso and the euro both weakened overnight, with the latter slipping to a three-week low. The Thai baht was the only gainer among Asian currencies, rising briefly to a six-session peak as gold prices touched a three-week high. Thailand is one of the world's largest gold trading hubs, and fluctuations in prices can significantly impact the baht due to the volume of imports and exports. Elsewhere, the Malaysian ringgit, Philippine peso and Indonesian rupiah weakened around 0.2 per cent. While markets remain jittery over Washington's latest protectionist signals, many investors appear to be betting on a familiar playbook — a policy reversal. Bank Indonesia (BI) is set to announce its interest rate decision on Wednesday. The market is divided on the central bank policy call as the ongoing tariff uncertainties could possibly delay any easing of monetary policy. Radhika Rao, a senior economist with DBS, said that despite a conducive inflation environment, recent financial market action might convince policymakers to stay on pause this week.
Business Times
11-07-2025
- Business
- Business Times
GoTo shares are tipped for rebound after US$2.2 billion sell-off
[SINGAPORE] South-east Asia's worst-performing tech stock this year is poised to rebound as it makes strides towards sustained profits and its fintech business provides plenty of upside potential, analysts say. The beaten-down shares of Indonesia's GoTo Gojek Tokopedia fail to reflect its ongoing profitability turnaround, according to JPMorgan Chase and Aletheia Capital. The e-commerce firm's financial discipline and buybacks also point towards the prospect of an upward re-rating, SGMC Capital said. GoTo shares surged after going public in 2022 but then slid almost 90 per cent to their lows last year. The stock is down 14 per cent in 2025, the worst-performing tech company on the MSCI Asean Index, wiping out US$2.2 billion of market capitalisation in the process. 'Operationally, the company is on a sound footing,' said Nirgunan Tiruchelvam, head of consumer and Internet at Aletheia Capital in Singapore. 'It has done all the right things, but the market for some reason seems to have punished the stock.' GoTo, which was formed via a merger of ride-hailing and food-delivery platform Gojek and e-commerce firm Tokopedia in 2021, reported its third straight quarterly profit on an adjusted basis in April as it cut costs and boosted sales. Adjusted earnings before interest, taxes, depreciation and amortisation, known as Ebitda, climbed to 393 billion rupiah (S$31 million), versus a pro forma loss of 101 billion rupiah a year earlier. Net revenue jumped 37 per cent. One driver of the improvement has been GoTo's fintech business. The firm's digital wallet and lending unit saw revenue jump by 90 per cent year on year last quarter, with monthly transacting users rising to more than 20 million. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up GoTo's fintech 'scale and trajectory is just starting up' and will rival those of its competitors SEA and Grab Holdings in terms of momentum, said Mohit Mirpuri, a senior partner at SGMC Capital in Singapore. 'This could be the dark horse in South-east Asia's fintech race.' Merger talk Another source of upside for GoTo's shares is the potential merger with regional rival Grab. While Grab is weighing a takeover of GoTo at a valuation of more than US$7 billion, regulatory hurdles are considerable. Despite frequent denials, market chatter ratcheted up again last month when Grab's sale of convertible bonds fuelled speculation it was building up a warchest for the acquisition. GoTo's 'current share price seems to have priced in a no-merger scenario and ignores the ongoing profitability turnaround of the business', Henry Wibowo, head of Indonesia research at JPMorgan in Jakarta, wrote in a research note last month. 'GoTo's share price is attractive at the current level and the recent pullback presents a good buying opportunity.' 'Limited upside' Other analysts are more sceptical about any potential rally, especially after GoTo sold its Indonesian online shopping app to China's ByteDance in 2023. 'GoTo likely has a limited upside for now as it no longer has e-commerce business, and Grab is outgrowing it slightly,' said Kai Wang, a strategist at Morningstar in Hong Kong. Much may hinge on GoTo's second-quarter results due this month. Investors will be looking for signs of further growth in the company's fintech business, progress on cost cuts from its decision to use the cloud services of Alibaba Group Holding, and any developments in the potential merger with Grab. In the meantime, bulls are looking beyond the noise. 'I do believe there's room for a rebound even without a merger trigger, especially if the company continues to deliver on profitability, execution, and capital discipline,' SGMC Capital's Mirpuri said. 'The stock right now is caught between reality and rumour. I would just kind of strip out the headlines and focus on the business.' BLOOMBERG
