Trading The Globe: Obama In Indonesia (IDX, IIT, FCX)

President Obama returned to Indonesia this week to renew pre-currency-war trade bonds. This week’s installment of CNBC’s Trading the Globe has details. Watch the video here.


Obama famously spent four years in Indonesia as a child, and analysts are pointing at his brief return to the country en route to Seoul’s summit of the G20 as a sort of reset on U.S. relations with the emerging world and the Muslim world in particular.

In any event, Indonesian stocks are booming — up 46% so far this year — so the closer we can integrate this extremely robust economy into our own portfolios, the better. The first place to look is the ETF (NYSE:IDX), which provides diversified exposure to some of the country’s biggest companies.

Interestingly enough, 2/3 of the Indonesian economy is geared toward domestic consumption and not resource exploitation for export. This brings it more in line with economies like the United States or Brazil, and makes local communications giant Indosat (NYSE:IIT) a natural one-stock proxy for the overall Jakarta market.

IIT is not cheap but it is growing and does provide exposure to those Indonesian consumers.

If you want a resource-oriented play on Indonesia, Freeport McMoRan (NYSE:FCX) may not be headquartered there, but does 56% of its business in its Indonesian mines.

This company continues to rally in the post-QE2 commodity boom.

Written By Tim Seymour From Emerging Money Emerging Money provides insightful and timely information about the increasingly important world of Emerging Market investments. CNBC Emerging Markets Contributor Tim Seymour leads the team of Emerging Money to bring you cutting edge global news and analysis.

About Tim Seymour: Tim is a founder of Emerging Money. He is a founder and Managing Partner at Seygem Asset Management, and The Emerging Markets Contributor to CNBC. Seygem Asset Management focuses on investing throughout the global emerging markets asset class. With a view that emerging and developing economies will continue to outpace the economic growth and advancement of developed economies, Seymour has devoted a career to investing in the dominant markets of tomorrow, today. Seymour’s career has included significant experience in both alternative asset management (hedge funds) and capital markets, having launched two hedge funds, and built the largest Russian broker dealer in the USA. Seymour started his career at UBS, focusing on international credit (cash, swaps, forex) in a specialized hedge fund group (New York). Seymour completed the firm’s training program after graduating with an MBA in international finance from Fordham University. Seymour received his undergraduate degree at Georgetown University.

Leave a Reply

Your email address will not be published. Required fields are marked *