North v South
October 17th, 2020
⏰ 1 minute read
⏰ 1 minute read
Bets on the north didn’t work out so well last time...
Divide
Several people have mentioned to me recently about he North South divide here in Asia. The north is apparently the much better investment bet because of China & also because they have technology companies & we down south, don’t. Evidence cited is China stocks are up this year while Indonesian stocks are down. But I’ve heard this story before....
2000
20 years ago in early 2000 when I was working here as a broker, I called one of my clients one morning to talk about the Indonesian stock market. He wasn’t interested. He told me he was too busy watching China Mobile share price double every week. It was tough, my clients were interested in China, Korea Taiwan, not Indonesia.
Apple
At that time investors were into dotcom, mobile telecoms, phone makers like Samsung & chips makers from Taiwan. But twenty years later that’s not how it worked out. China mobile shares are lower than they were then, Samsung has been thrashed by Apple & Chinese, Korean & Taiwan stock markets have barely doubled which is only about +5% a year.
Commodities
One of the biggest trends which investors were missing at least for the next 13 years was commodity. The 2000s ended up being about Oil, Gold, palm oil. This trend helped the unloved Indonesia market to much higher gains. In 2000 the JCI was only 550 now even though it’s down recently, it’s still up 10X. South beat North handsomely.
BBCA
One of the greatest examples is BBCA. While investors fawned over China mobile at USD45 a share, BBCA struggled for months to get above its IPO price Rp140 (split adjusted). Today CHL is USD33, BBCA Rp28,000... Learn the lessons of the past, like last time, the future is not going to be North, it’s going to be South, Indonesian stocks....
Several people have mentioned to me recently about he North South divide here in Asia. The north is apparently the much better investment bet because of China & also because they have technology companies & we down south, don’t. Evidence cited is China stocks are up this year while Indonesian stocks are down. But I’ve heard this story before....
2000
20 years ago in early 2000 when I was working here as a broker, I called one of my clients one morning to talk about the Indonesian stock market. He wasn’t interested. He told me he was too busy watching China Mobile share price double every week. It was tough, my clients were interested in China, Korea Taiwan, not Indonesia.
Apple
At that time investors were into dotcom, mobile telecoms, phone makers like Samsung & chips makers from Taiwan. But twenty years later that’s not how it worked out. China mobile shares are lower than they were then, Samsung has been thrashed by Apple & Chinese, Korean & Taiwan stock markets have barely doubled which is only about +5% a year.
Commodities
One of the biggest trends which investors were missing at least for the next 13 years was commodity. The 2000s ended up being about Oil, Gold, palm oil. This trend helped the unloved Indonesia market to much higher gains. In 2000 the JCI was only 550 now even though it’s down recently, it’s still up 10X. South beat North handsomely.
BBCA
One of the greatest examples is BBCA. While investors fawned over China mobile at USD45 a share, BBCA struggled for months to get above its IPO price Rp140 (split adjusted). Today CHL is USD33, BBCA Rp28,000... Learn the lessons of the past, like last time, the future is not going to be North, it’s going to be South, Indonesian stocks....
