The Magazine for Asian Investors
Rising inflationary pressures have now reached Asia, which is also making itself felt in Southeast Asia. Rising commodity and energy prices are currently putting pressure on the general economic mood in the regions of Southeast Asia. In such times, investors are looking for protection against rising inflationary pressures. Commodities have always been considered a good hedge in a rising inflation environment. Hence, investors are also looking at the major commodity companies, of which there are many, especially in Indonesia, the world’s largest exporter of coal.
Some of the commodity companies traded on the Jakarta Stock Exchange could make huge profits within a year.
The stock of PT Golden Eagle Energy tbk (SMMT), one of the major coal mining companies in Indonesia, could rise a full 1,125.00% in one year from a price of 100.00Rp to 1,225.00Rp.
Shares of Astrindo Nusantara Infrasruktur Tbk PT (BIPI), a company engaged in port operations and coal mining, have already risen 120% from Rp 50 to Rp 110 in one year.
Shares of Bumi Resources Minerals Tbk PT (BRMS), a company that mines various minerals such as zinc, copper, gold and iron ore, have already risen 220% from Rp 72.5 to Rp 232 in one year.
Shares of Energi Mega Persada (ENRG), a company that produces and trades oil and gas, have already risen 61.1% in one year, from Rp 113 to Rp 182.
In an inflationary environment, investors might want to focus on a diversified portfolio and hedge it with commodities or mining companies. The war in Ukraine has caused many Western countries, including the U.S., countries in the EU and some Asian countries, to impose sanctions on Russia. This will narrow the market for commodity traders in these countries, leading to higher prices. However, investors should not lose sight of the measures taken by central banks. The loose monetary policy pursued by many countries to supply the economy with cheap currency units has a very inflationary effect, which is why commodity prices had already risen sharply before the outbreak of the Ukraine war.