Jakarta Stocks Reaching Peak Valuation, Citigroup Says
This article is for subscribers only.
Indonesia’s Jakarta Composite Index may be reaching a peak in its valuations with “buying momentum” likely to lift the measure by a further 6.5 percent before share prices decline, according to Citigroup Inc.
The gauge may rise to 3,700 in the short-term based on an estimated valuation of two standard deviations above its average over the past six years, analysts led by Alex Wreksoremboko said in a report yesterday. A “more sustainable” medium-term valuation would be one standard deviation higher at about 14 times estimated earnings, which translates into a level of 3,400 for the benchmark, according to the brokerage.