Indonesia’s still a darling for investors shrugging off earnings

JAKARTA (May 5): Two thirds of Indonesia’s major companies missed earnings estimates in the first quarter, but that’s done little to stop investors from pouring into this enduring emerging-market darling. 

Overseas funds pumped the most money into the market in April for any month since mid-2014, even as Indonesia’s capital region saw its business-friendly governor lose a reelection campaign. The Jakarta Composite Index is little more than 1% from the record high reached last week, showing little evidence of concern about commodity-price declines or signs of a slowing in Chinese growth.

What’s giving confidence to foreign money managers from Aberdeen Asset Management Plc to Jupiter Asset Management Ltd. is an expansion in capital spending and sustained economic growth rates of around 5% that compare favorably with developed markets. Last year’s cuts in interest rates continue to fuel investment demand, investors say.

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