By Fintan Ng
EARLY last year, my friends and I flew to Jakarta for a short three-night visit. For most of us, who have only ever been there for work, the trip was an eye-opener.
For me, being on only the second trip to the city and to the country (no, I’ve not been to Bali or the other islands and the first trip was for work), it was an opportunity to take in the feel of the capital city of Indonesia at a more leisurely pace without my editors pestering me for stories.
Jakarta is typical of any large and sprawling metropolis. Having been to Bangkok several times, I was quite prepared for the infamous traffic congestions, which I had a good view of from my hotel, which faced the main north-south artery.
While we all grouse about traffic, it can, to a certain extent, be a gauge of the economy with heavier traffic being the sign of a thriving economy. By the way, the Toyota Vios is widely used as a taxi in the city, a fact which my friends keep pointing out since I drive one myself.
But just how well is the economy doing and how do analysts view this archipelago nation of 248.64 million?
Morgan Stanley Research analysts said in an equity strategy report published last month that they have upgraded Indonesia to “positive” from “neutral” and ranked the country as their most preferred “Asean 3” market. They remain “positive” on Thailand and “negative” on Singapore.
According to them, the MSCI Indonesia has begun to outperform the MSCI Asia ex-Japan by 852 basis points since the beginning of the year although if measured from January 2012, the gauge has underperformed the MSCI Asia ex-Japan by 817 basis points.
“We believe Indonesia’s outperformance could continue on the back of improving outlook for external environment and strong growth in business confidence,” they said.
The Boston Consulting Group has also published a report, Asia’s next big opportunity, in which it said the country’s middle-class and affluent consumers (MACs) “is growing in size and purchasing power”.
From the 20-page report, several salient points can be extracted: there are currently 74 million people in the MACs group, and this will double by 2020.
The report noted that this was a critical window of opportunity for companies that sell consumer goods as MACs ramp up their spending in key segments such as home goods, vehicles, consumer durables and financial services.
It’s too bad I am not able to write more on this fascinating country, which have sent so many of its sons and daughters to Malaysia to work.
In the coming years, we are likely to see fewer Indonesian migrant workers as better-paying opportunities open up for them at home but it’s always good to see a neighbour doing well. Who knows, perhaps Malaysians will be going over there to seek for opportunities in the near future.