JFam makes Indonesia play

JF Asset Management predicts the stock markets of Indonesia will do better next year than their impressive gains in 2006.
JF Asset Management (JFam) has signalled its faith in the Indonesian economy, launching its first dedicated fund for the country. With this latest launch, JFamÆs single country range of funds now covers every major regional stock market.

The newly launched JF Indonesia fund will target Hong Kong investors and will consist of an as yet unnamed portfolio of securities linked to the Indonesian economy and listed on its stock exchanges. The firm is pitching the fund to Hong Kong investors as a long-term investment story.

According to JFam, the fund is being launched due to solid fundamentals in the Indonesian economy, the successful implementation of recent government policies and recently announced infrastructure projects like toll roads and energy in the country. The asset manager also believes that Indonesia will become AsiaÆs main beneficiary in the commodity super-cycle given its standing as a top five producer of tin, rice, cocoa, copper, rubber, coffee, tea and nickel.

ôIndonesia is a country on the move,ö says Terry Pan, head of retail business in Hong Kong. ôThe governmentÆs policies are working, putting Indonesia well on track for better economic performance and higher sustainable growth. We believe that now, more than any time since the Asian crisis, is the right time to invest in Indonesia.ö

Aside from the strong economic picture, the countryÆs equity performance has been an influencing factor on the performance of JFamÆs Asian funds in 2006.

ôOur regional equity portfolios went overweight on Indonesia in the second quarter of 2006 and good Indonesia stock picks by our Southeast Asia specialists have boosted the performance of our Asian funds this year,ö he says. ôWe are confident that the outlook for Indonesia in 2007 is even better than it was for this year and early investors stand to gain the most.ö

The JSX Composite Index has risen nearly 50% year to date.

The new Indonesia fund will be managed by Joshua Tay out of JFamÆs Singapore offices and was officially launched on 1 November. Benchmarked to the MSCI Indonesia Index, the fund is denominated in US dollars and requires a minimum investment of $10,000. Fees are set at 1.5% per annum plus an initial charge of up to 5% of net asset value.

Upon launch, the JF Indonesia fund will join the asset managerÆs existing suite of country-specific Southeast Funds. Presently, JFam allows Hong Kong investors access to country specific portfolios in India, Malaysia, the Philippines, Singapore and Thailand.

The firm will also launch another country-specific fund in Asia in the coming weeks. It would not identify the country but given the rush of Vietnam country funds of late, thatÆs AsianInvestorÆs guess.
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