Consumer staples the place to be as Indonesia recovers

THE Indonesian rupiah has cratered, losing more than 20 per cent of its value and hovering north of 12,000 to the US dollar for weeks. Shares have plummeted in a run-up to elections, while fuel price hikes have sparked rampant inflation. It sounds like 2013, but the year is 2008.

As this year closes, investors are bracing themselves for more months of uncertainty in the lead-up to parliamentary elections in April and a presidential poll in July. After the stock market soared to a record high in May, shares tumbled 25 per cent in US dollar terms. The rupiah will limp into 2014 as the worst-performing currency in Asia, after ending its worst year since 2000, Bloomberg data showed.

But this sell-off presents possibilities for bargain hunters, and if 2009 is any guide, the sector to look out for is consumer staples - the products that we can't live without, such as pharmaceuticals and food.