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A plan by the IMF to raise $600 billion in new funds to help tackle Europe’s debt crisis helped boost Asian markets to a two-month high. But countries including the United States are warning that any increase in lending by the IMF should supplement European countries’ own efforts to resolve their debts.
Any Asia outlook piece is sure to address the sustainability of China as the proverbial Atlas carrying the world on his shoulders. The consensus is for slower growth next year, but for every note claiming a manageable reduction in growth there is another foretelling a crash to the bottom.
Jakarta’s gain of 3.2% and return to investment grade makes Indonesia the standout among Asian peers for 2011. An accommodative monetary policy and strengthening credit environment should drive the economy into2012 and warrant an overweight position in the emerging Asia portion of portfolios.
Fitch became the first of the three credit agencies to return Indonesia to investment grade since the country lost the rating 14 years ago. But retail investors looking for a way back to the country have several options to consider.
PT Astra International, Indonesia’s largest auto retailer, is projecting modest domestic car sales growth next year as Indonesian consumers feel the pinch of the global economic downturn.
Indonesia gave local bankers a surprise last week by cutting interest rates a full 50 basis points, but moves like this are becoming more common as Asia chooses to nurture flagging growth instead of fighting persistent inflation.
A partnership between Nathaniel Philip Rothschild, heir to the ancient European banking family, and the Bakrie brothers, members of one of Indonesia’s most powerful business families, is in jeopardy.