Indonesia Banks' Loftiest Valuation Since 2001 Emerges Amid Rout

Indonesian banks are trading at the most expensive levels in at least 14 years relative to their emerging-market peers, underscoring their resilience amid the selloff in developing-markets.

The MSCI Indonesia/Financials Index is valued at 2.4 times the value of net
assets, the highest in Southeast Asia and more than five times that of the MSCI Emerging Markets Financials Index. The Indonesian gauge has climbed 1.2 percent in the past month, led by PT Bank Mandiri, compared with a 15 percent slump for the broader finance gauge.

Profit at companies on the MSCI Indonesian finance gauge are projected to grow 12 percent in the next 12 months, data compiled by Bloomberg show. Indonesia’s central bank earlier this month forecast average credit growth of 12 percent for the country’s lenders. Loans grew 9.8 percent in November from a year earlier, it said in a statement on its website.

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