MCHI - EIDO: Indonesia Poised To Bounce Back
2025-04-16 11:31:33 ET
Summary
- Southeast Asian markets, particularly Indonesia, have struggled, but EIDO is a "BUY" due to a weakening dollar, falling valuations, and potential growth bottoming.
- EIDO's expense ratio is lower than IDX, and it offers a purer play on Indonesian equities, with financials making up nearly half its holdings.
- Global trade tensions and a declining US dollar could benefit emerging markets like Indonesia, making it well-placed for short- to medium-term gains.
- Indonesian stocks are historically cheap, suggesting positive returns over the next three years, especially if further selloffs or political turmoil occur.
Southeast Asian markets have fallen considerably over the last seven months, as you can see in the following chart of ETFs. The iShares MSCI Indonesia ETF ( EIDO ) has fallen 30%, although this is off the lows of the tariff scare.
Chart A. Most Southeast Asian stocks have been declining since September. (StockCharts)
