Ever wish you could go back in time and get in on the ground floor of online stock-trading names like Charles Schwab Corp. (NYSE:SCHW), TD Ameritrade Holding Corp. (NYSE:AMTD), or E TRADE Financial Corporation (NASDAQ:ETFC)? While all three stocks have done fairly well since debuting anywhere about 20 years ago, the lion's share of their gains came in just the first few months of their existence. SCHW rallied just shy of 400% in its first eleven months of trading. AMTD soared more than 750% during its first six months of being a publicly-traded stock. ETFC had jumped a whopping 1289% nine months after its IPO. Well, while nobody can get in a time machine and do it over, there's another online-trading company on the horizon that could be similarly potent. It's Indo Global Exchanges PteLtd (OTCMKTS:IGEX).
If you've never heard of Indo Global Exchanges PteLtd, don't worry - you're not alone. The company only came into existence (in the form we know it today) a few months ago. You'll also not likely hear about it as an investor/consumer here in North America either, so the likes of E TRADE Financial, TD Ameritrade Holding, and Charles Schwab have little to worry about in the way of new competition... yet, anyway. That's because IGEX is taking aim at the Indonesian market, bringing an impressive stock-trading platform to a country and locale that has nothing like that at all.
It would be easy to quickly dismiss the opportunity based on the target market alone; as solid as the brokerage and trading technology is, it's still just Indonesia, right? Point of clarification: There's no "just" anything about Indonesia. It IS not only an impressive economy, but it's also an impressive opportunity for a company like Indo Global Exchanges that can give its rapidly maturing middle class - and rapidly growing investor base - something it doesn't have, but desperately wants.
Most Americans may be surprised to learn that Indonesia is home to 250 million people. For perspective, the United States' population isn't much bigger, at 313 million. And, Indonesia is hardly the third world country many in the Western world may presume. It's the fourth largest economy in the world, and the second-fastest growing. Last year, Indonesia's GDP grew 6.2%, and is on pace to grow 6.3% this year. It's a pace the United States could be envious of.
Those 250 million people are also internet savvy too... perhaps even more so than United States' populous. Indonesia, as a country, is the biggest user of Facebook, and smartphones are becoming the norm.
It's not just the advent of technology that makes the market a prime opportunity for IGEX, however. The country's rapid economic growth has given risen to a large, solidly-affluent middle class with disposable assets that are struggling to find a capital markets home. Indo Global Exchanges PteLtd estimates there are 30 million potential customers that are immediately qualified and willing to become clients, and that number could rise to as many as 140 million if the country's economy continues to grow at its current pace and pulls more citizens into its middle class.
The bottom line is, where IGEX is now in Indonesia is where Charles Schwab Corp., TD Ameritrade Holding Corp. and E TRADE Financial were in the United States in the mid 90's. At the time, most people had a vague belief that "this online stock trading thing could take off", but nobody saw it becoming the disruptor (perhaps even the norm) for an industry that was built around a broker pitching stocks to clients over the phone. As dramatic as that paradigm shift was in North America, Indo Global Exchanges' march into the Indonesia market - where it faces virtually no competition - could be just as dramatic... and bullish.
For more on Indo Global Exchanges PteLtd, visit the SCN research page here.
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