Already riding a rebound in coal and nickel prices that’s made them some of the hottest stocks in Asia, Indonesian miners may get an extra tailwind from Donald Trump.
A gauge of Indonesian miners has risen 21 percent this quarter, compared with a 4.6 percent decline in the Jakarta Composite Index, as output curbs in China pushed up coal prices and nickel was supported by an environmental crackdown in the Philippines, the world’s top supplier. Mining and agriculture were the only two of nine industry gauges on the JCI to climb on Friday as the measure plunged 4 percent in its biggest drop in three years.
Emerging-market stocks and currencies are taking a beating on speculation the Federal Reserve will have to raise interest rates faster than anticipated to contain inflation if President-elect Trump follows through on pledges to ramp up spending.
That’s spurring outflows from developing nations and supporting the greenback, a boon for Indonesian miners that sell commodities priced in dollars. Goldman Sachs Group Inc. sees nickel among metals that will benefit from more infrastructure building in the U.S.
“The Trump victory will improve the outlook for commodity producers and higher geopolitical risks globally could potentially push energy and commodity prices higher,” said Jemmy Paul, investment director at PT Sucorinvest Asset Management in Jakarta. “The current strengthening of the U.S. dollar will improve the bottom lines of the mining and commodity companies.”
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