(2024-02-25 23:41:18.646 GMT)
By John Cheng
(Bloomberg) -- Goldman Sachs raises its view on Indonesian stocks to overweight following the result of the Feb. 14 elections, which saw Defense Minister Prabowo Subianto declare victory.
■ “While official results will be announced by March 20, the outcome indicates reduced uncertainty over political transition after current president Joko Widodo’s 10 years in office,” strategists including Timothy Moe write in a note
■ “We expect broad policy continuity in the next administration, which should be supportive for the economy and equity market”
■ Indonesia’s macro backdrop is “attractive” with 5% GDP growth, 2.9% inflation
■ 4Q23 earnings are coming in ahead of expectations, and the brokerage expects moderately above consensus growth in 2024 and 2025
■ Valuations are inexpensive; the brokerage has a constructive view on banks which make up 62% of index weight
■ Lifts JCI target to 8,000 from 7,800 on better earnings growth