Dhananjay Phadnis, Portfolio Manager of FF Indonesia Fund:
“The outcome of the presidential election is not expected to change or affect our long-term positive view on Indonesia. Despite the close race between the two leading candidates, it is important to note that both candidates (Joko Widodo and Prabowo Subianto) have very similar agendas. Thus, as long as one of these two candidates actually wins, we can still expect reforms to be made in the following areas:
i) infrastructure;
ii) healthcare;
iii) and fuel prices (gradually).
The implementation of these reforms will be key to the development of the Indonesian economy in the medium to long term. The FF Indonesia Fund continues to be well positioned in secular themes relating to infrastructure, healthcare and consumption."
Gillian Kwek, Portfolio Manager of FF ASEAN Fund:
“On a political front, Indonesia is in the midst of presidential elections. There is a lot of optimism that Joko Widodo will win but personally I think both candidates seem to be strong leaders and pragmatic businessmen, and they are aware of the issues that Indonesia faces in the longer term. After the elections, with uncertainty out of the way, some of the investments that have been held back will start to return to the country. Hopefully, the new president will be able to tackle some of thelonger-term issues facing the country like improving infrastructure, reducing reliance on subsidies and driving more business investments so that Indonesia can turn into a current account surplus country without having to rely so heavily on commodity prices. In the longer term, I remain positive on the Indonesian economy as it is generating strong domestic momentum and should be able to sustain a 4-6% real growth. In the short term, after having a sharp run up, the market is looking fairly priced at 15.2x FY14 PE with a 11% growth.”
A follow-up commentary on the Indonesian presidential election will be released later this week after the polls close.
Fund Performance:
The FF Asean Fund Y-ACC-USD is ranking in the 1st. Quartile over the first year, 2nd Quartile over 3 years and 1st Quartile over 5 years. The fund performed over the past 1 year equal to the benchmark: -2,8 %. Over a 3 year period the fund performed 15,2% vs. 12,3 % (benchmark) and 118,2 % vs 108,2% over 5 years.*
The FF Fund Indonesia Fund Y-ACC-USD is ranked in the 2nd Quartile over 3 years. **
