Nomura Equity Research said it expects the Indonesian market to
perform "relatively well" amid a global economic slowdown on the
back of strong macroeconomic fundamentals, prudent monetary
policy and tough fiscal discipline.
Nomura's head of equity Wilianto Ie said a rise in
purchasing power and economic growth will lead to enlarged
market size and an increase in foreign direct investment will be
followed by rising competition.
"We anticipate competition to intensify in the coming years
and prefer companies with strong brand equity, upcoming market
share winners, and industries with high entry barriers," he
Nomura is bullish on the infrastructure and discretionary
consumer sectors, while it is 'neutral' on banks, telecom and
property sectors. However, it is 'underweight' on consumer
staples, metal and mining sectors.
The research house's top picks include automotive producer
Astra International Tbk, state-controlled lenders Bank
Rakyat Indonesia Tbk and Bank Mandiri Tbk,
cigarette maker Gudang Garam Tbk and toll operator
"We expect resilient domestic consumption, subdued inflation
and good results will send the Jakarta Composite Index into
another upward rally in coming years," the brokerage said.
The Indonesian index was up 0.07 percent.
1209 (0509 GMT)
(Reporting by Andjarsari Paramaditha; Editing by Anand Basu)