After 1,000% Returns Southeast Asia's Hottest Stocks Fizzled Out
People look toward a screen and an electronic ticker board outside the Bombay Stock Exchange (BSE) building in Mumbai.
Photographer: Dhiraj Singh/BloombergThis article is for subscribers only.
The past two years have been stellar for Indonesia’s pulp and paper stocks. But that hot trade has since fizzled as concerns surrounding slowing global growth and the U.S.-China trade spat depressed demand in the sector.
Shares of PT Indah Kiat Pulp & Paper and PT Pabrik Kertas Tjiwi Kimia soared more than 1,000% in the two years leading up to 2019 -- making them the best performing stocks on Southeast Asia’s benchmark MSCI Asean Index. The surge was partly due to the price of Chinese pulp sky-rocketing in 2017, China’s ban on U.S. waste paper import for a month in 2018 and tax breaks for new plants in Indonesia.