However, Liew emphasises that these businesses are not making losses – they have only become less profitable: “We expect to see lower profits from Indonesia companies compared to five to 10 years ago, which is a similar trend we observe for other markets in general.”
Liew points out that President Widodo is a catalyst for dismantling structures of excessive private profit. “But even then, some sectors and businesses – such as telecommunications, FMCG and construction – have avoided direct intervention by the government to reduce profitability,” he adds.
Where are the opportunities?
According to Liew, opportunities in the market where demand is already growing faster than supply lie in mobile telecommunications and infrastructure construction services. “Telecommunications and construction are in the middle of a demand up-cycle and this is good for company profits in these sectors,” Liew discloses.