Handful of Standout Firms Only Places to Hide in Indonesian Rout

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(Bloomberg) -- There are no defensive plays left in Indonesian stocks and the only places to hide are in standout companies or firms that are getting a commodity-price tailwind, according to PT Sucorinvest Asset Management.

The Jakarta Composite Index has fallen 6.8 percent over the past month, the most among Asian emerging markets, on concern about the weakening rupiah. All nine of the gauge’s sub-indexes have dropped and only three of the 45 biggest companies -- PT Vale Indonesia, PT Bukit Asam and PT Indofood CBP Sukses Makmur -- have managed to eke out gains.

“All sectors are being beaten down,” said Jemmy Paul, investment director at Sucorinvest Asset in Jakarta. “We, as fund managers, used to hide in the consumer stocks” but their performance has been very weak, he said.

Nickel miner Vale has benefited from a surge in prices of the metal in the first half of April and on expectations prices will rally further, Paul said. Coal miner Bukit Asam and noodle-maker Indofood had very good first-quarter results and Bukit Asam has also been the recipient of funds switching out of its poorly performing competitor PT Adaro Energy, he said.

Overseas investors were net sellers of Indonesian stocks for a 12th straight day on Tuesday and have pulled $963 million from equities so far this quarter. There’s also concern that some Indonesian companies will be trimmed from the MSCI Emerging Markets Index this month, Paul said.

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