It passed a long-awaited law to clear infrastructure bottlenecks and won an upgrade from Fitch. Yet these were already priced in. As global investors retreat from risky markets, Indonesia’s risks for investors are on the downside - even though its economy should remain strong.
Asia’s emerging economies, like Malaysia, the Philippines and Thailand, should outperform as global growth stalls. Bonds will gain as policymakers fight slumping exports and sagging stocks by cutting interest rates. Foreign capital flight remains a risk, but these sovereigns offer surprising safety.
Buying a piece of Frac Tech, a U.S. gas services company, for a mooted $2.2 billion would be a savvy move by China’s national energy majors. Frac Tech’s drilling technology should be easy to copy, and could help China unlock 140 years of gas supplies. The strategic benefits justify a premium price tag.