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Is Indonesia the New “I” in BRIC?

There’s talk that Indonesia may be the new “I” in the BRICs bloc of emerging markets, replacing India.

Goldman Sachs’ Jim O’Neill, coiner of the term “BRIC,” says it’s a strong contender:

“Indonesia has a few issues on valuations along the lines of India, as well. Other than that the Indonesian story is very powerful.”

Indonesia is now one of the four biggest markets in Goldman Sachs’ N-11 Equity Fund in what O’Neill considers the next big 11 markets, including Mexico, South Korea and Turkey, or the so-called “MIST” nations.

Indonesia is a big component of the outperformance, thanks in a big part to Indonesians splurging on cars and mobile phones.

Despite its advantages, Indonesia’s not immune to the slowing global economy, says Sean Darby, Head of Equity Strategy at Jeffries Global:

“The difficulty now is Indonesia is going to run on a domestic consumption story and without exports really meaningfully contributing on a year-on-year basis that suggests to me that economic numbers will be weaker. It’s certainly one of the most favorite destinations in emerging markets but I think we will have to be cognizant that it too is going to slow down.”