Swedish asset manager Coeli has begun buying Indonesian equities after the
benchmark index tumbled about 30% year-to-date, saying current valuations are
attractive. MSCI warned in January it may downgrade Indonesia to frontier-market
status; concerns over market transparency, high ownership concentration and low
free float have driven outflows, with global funds net-selling $4.7bn of
Indonesian shares so far this year. Rising oil prices and the risk of faster
inflation have added pressure, and the rupiah has weakened roughly 7% versus the
dollar since end-December, the weakest performance in Asia. Coeli’s frontier
markets fund targets countries with GDP per capita below $10,000 that it says
are overlooked by foreign investors.
