Profiting on 'Bajaj-Priced Mercedes' Stocks Amid Window Dressing

LQ45, the index comprised of the stock exchange’s blue chips, is still lagging behind the IDX Composite in performance. Despite that, some of LQ45’s constituent stocks are worth paying attention to.

M. Nurhadi Pratomo

19 Des 2023 - 16.22
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Profiting on 'Bajaj-Priced Mercedes' Stocks Amid Window Dressing

Illustration - An officer was showing the stock movement monitoring board at the Indonesian Stock Exchange (IDX) office./Bisnis-Eusebio Chrysnamurti.

Bisnis, JAKARTA — Ahead of window dressing season and Santa Claus rally, a number of blue-chip stocks in the LQ45 index in 2023 still meet the criteria of a “bajaj-priced Mercedes” as coined by prominent investor Lo Kheng Hong to describe undervalued stocks.

The performance of the LQ45 index, which represents blue-chip stocks on the Indonesia Stock Exchange (IDXI), is still lagging behind the IDX Composite in performance. IDX data shows that LQ45 has only strengthened by 2.22 percent year-to-date (YTD) as of Friday (12/15/2023), while IDX Composite has gained 4.97 percent over the same period. 

Nevertheless, the LQ45 index report is more prominent compared to other main indices, such as IDX30 and IDX High Dividend 20, throughout the year.

Anticipating the window dressing and Santa Claus rally, some blue-chip stocks in the LQ45 index are still traded with low price-earnings ratios (PER) and price-to-book ratios (PBV). While these indicators are not the only analytical tools used to determine the expensive or cheap valuation of a stock, Lo Kheng Hong often refers to them as the simplest way.

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Editor: Yusuf Waluyo Jati
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Profiting on 'Bajaj-Priced Mercedes' Stocks Amid Window Dressing

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