The Jakarta Index (JKSE) is up 70% over the last year. That seems like a big number.

A look at the Indonesian economy indicates that the market there may be getting ahead of itself. The equivalent of GDP in the Southeast Asian country is expected to grow about 5.7% this year. Some estimates put that number even higher. But, a great deal of this strength is based on demand for commodities that Indonesia exports, especially metals, coal, crude palm oil and rubber.

In some ways, this makes the financial strength of the country a one-legged stool. And, those are known to tip over from time to time.

Douglas A. McIntyre