<\/p>\n
A selloff in Indonesian assets that accelerated during the Iran war has created a buying opportunity, prompting a South African money manager with $29 billion in assets to enter the market.<\/p>\n
The Jakarta Composite Index is the world\u2019s worst-performing benchmark this year, down more than 35% in dollar terms among the 92 equity indexes tracked by Bloomberg. The selloff has largely been driven by MSCI\u2019s January warning that Indonesia could be downgraded to frontier-market status due to investability concerns and the limited number of shares available.<\/p>\n
Authorities have since introduced a series of reforms, which MSCI will review in November. However, market sentiment suffered another setback on Wednesday after S&P Dow Jones Indices signaled the country could eventually lose its emerging-market status if concerns over its equities market persist. Stocks fell 1.3% amid broader weakness across regional markets.<\/p>\n
The Indonesia Stock Exchange (IDX) in Jakarta.<\/p>\n
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Investors have also been rattled by concerns over fiscal policy, governance, the weakening rupiah and policy predictability under President Prabowo Subianto.<\/p>\n
Such \u201cperiods of heightened volatility and investor uncertainty present a particularly fertile hunting ground for patient, valuation-driven investors in frontier markets,\u201d Rory Kutisker-Jacobson, a portfolio manager at Allan Gray wrote in a note Tuesday. \u201cThese markets are often overlooked or poorly researched by global investors, resulting in significant pricing inefficiencies and, at times, compelling opportunities.\u201d<\/p>\n<\/p>\n
The Cape Town-based asset manager made its first investment in Indonesia last month in PT Indofood Sukses Makmur, one of the world\u2019s largest makers of instant noodles, and plans others.<\/p>\n
\u201cWe have increased our focus on the country and written several internal research reports on potential opportunities,\u201d Kutisker-Jacobson said.<\/p>\n
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\u201cOn our estimates, INDF trades on just over five times earnings, which we believe is a good price to pay for a dominant, cash-generative, consumer-facing business,\u201d he said.<\/p>\n
The Allan Gray Frontier Markets Equity Fund, co-managed by Kutisker-Jacobson, has returned nearly 9% so far this year. During the quarter, it initiated small positions in Mexico, Poland and Turkey, while trimming its holding in Seplat Energy Plc, which has delivered a strong performance this year on the back of elevated oil prices, he said.<\/p>\n
Brent crude prices have retreated following a truce between the US and Iran last month that eased concerns about disruptions to shipments through the Strait of Hormuz, a key energy transit route.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Indonesia #selloff #lures #R472.5bn #Allan #Gray #enter #market<\/p>\n","protected":false},"excerpt":{"rendered":"
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