This report presents the result of a study to identify industries that have a good growth potential and to select companies within those industries to invest in. The study uses fundamental analysis approach. Fundamental analysis is a systematic method of narrowing down the selection process; it is sequenced through the sectoral analysis of the macroeconomics, continued with the industry selection and analysis, and concluded with the evaluation of companies within the selected industries.



In the macroeconomic analysis, the study revealed the critical need of infrastructure development to maintain the economic progress of this country. Despite the prevailing high interest rate, the construction of infrastructure facility has been going on at a brisk pace during the last two years.



Two industries, cement and cable industries, are identified as having good outlook over the next three years. Both industries are currently operating at full capacity to fill the demand from infrastructure development sector. Major capacity addition is envisaged. This could lead to an oversupply in domestic market. Nevertheless, there is a possibility for the producers to export cement and cable if the need arises.



Three cement companies and five cable companies are listed on the Jakarta Stock Exchange. This study evaluated the prospects and financial conditions of those public companies. Based on the evaluation, the recommended stock to hold are P.T. Indocement and PT SUCACO.



Research Location: PT Indocement and PT Sucaco.

Supervised by: Marita O' Sullivan, MBA

Accepted: December 1991.