Question
Please solve with details, I want a full answer. You will write a report on a Indonesia market. Your targeted audience is a busy foreign
Please solve with details, I want a full answer. You will write a report on a Indonesia market. Your targeted audience is a busy foreign investor. You should provide some historical and current political details, describe the economic and financial environment, and the prospects of your chosen country. Finally, you should provide the foreign investor two stock recommendations..
A. Necessary Information
Anticipated GDP or GNP growth. Monetary policy. You should provide an evaluation of inflationary prospects and interest rates. Wages and employment conditions. It is important to know the relative wage with respect to other countries. Social and political situation. The goal is to try to evaluate country risk. Competitiveness. You should provide an evaluation of productivity. Fiscal situation. Describe the government budget situation. You might also want to discuss tax issues, which should include incentives to investment and foreign investment.
Sources: You can obtain this information from the IMF, reports by the World Bank, BIS, OECD, Central banks, etc. Also, The Economist, Euromoney, and other publications periodically publish macro data for many countries and country reports.
B. Figures or Graphs 1. Macroeconomic Indicators (4 years of history + forecasts): GDP growth (GDP forecast is a must) Inflation Trade Account (imports, exports and current account balance) Exchange rate against the USD Investment and productivity
2. Market Indicators (4 years of history + forecasts, if available): Stock Market Index (level, yields, P/E, EPS, if available) Government Bond yields (short-term and long-term)
3. Stocks (4 years of history for individual stocks + analysts' forecasts, if available): 10 largest stocks (price, yields, PE, EPS, if available)
Sources: same as above + Financial Times, Barron's, Morningstar, Bloomberg, Market Watch, The Wall Street Journal, stock exchanges, country reports.
C. Text You should discuss the political and economic background of the country current situation, which includes: Current events Macroeconomics (economic growth, monetary policy, government deficit, labor markets, etc.) Sectorial analysis Country risk Taxes Exchanges rates Equilibrium P/E (fair valuation)
Recommendation: based on your analysis you pick a pair of stocks and explain why. You should also include financial data -i.e., revenues, earnings, PE, etc.- for those stocks you recommend.
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