APD | Indonesia to become largest securities market in Southeast Asia, surpassing Thailand

By APD writer Alice

Southeast Asia’s largest economy, Indonesia, is expected to surpass Thailand to become the biggest equity market in the region.

Currently, the capitalisation value of the Indonesian stock market reaches $529 billion, equivalent to that of Thailand, which gained the No. 1 position in Southeast Asia from Singapore in May 2019.

Thailand is struggling with a strengthening baht and saw its SET Index as the region’s only benchmark to decline in the past three months.

In contrast, Indonesia's Jakarta Composite Index rose 5.5% in dollar terms over the period. President Joko Widodo is embarking on a series of new infrastructure projects and pursuing reforms to stimulate the economy of the fourth most populous nation in the world.

Indonesia has become Southeast Asia's largest stock market in a few short periods from January to April last year. Since 2003, this position has been largely held by Singapore.

Vincent Mortier, deputy chief investment officer at Amundi Asset Management, which manages about 1.56 trillion euros ($1.74 trillion) of assets, said "There is a big opportunity in Indonesia. It has a growth story, political landscape and valuations”. Meanwhile, he downgraded Thailand's ranking because of its weak economy.

Indonesia’s PT Bank Central Asia now ranks as the region’s biggest company by value, at about $62 billion, surpassing Singapore’s DBS Group Holdings Ltd. and Thailand’s PTT Pcl.

The Bloomberg data shows that the biggest Southeast Asian market ranks 21st globally. Moreover, eight individual companies are worth more than the market of either Thailand or Indonesia, including three trillion-dollar firms: Saudi Arabian Oil Co., Apple Inc. and Microsoft Corp.

(ASIA PACIFIC DAILY)