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In order to be successful in long-term investment, we need to be aware of present and future trends in the market. It is usually very profitable to be able to spot a trend and invest at an early stage. Right now, I have identified trends that are both ongoing and in the making.

The trends might have not been prized in the market. Also, these trends are substantial enough to shape the macro forces that will drive both the top and bottom line growth of the firms operating inside these sectors.

Now, those trends are supported by the same single force: the extraordinary strength of our domestic consumption. Lastly, I will share my observation on some potential risk in one segment of our financial sector.

The first trend is the boom of our advertising industry, which is fueled largely by competition among telecommunication operators, consumer goods companies, financial service providers, and political parties, trying to gain market share by advertising their products and services.

Growing income per capita gives rise to this new middle class with rising purchasing power.

Their complex needs and tastes drive enterprising companies to offer multitude of new products and services.

In order to get a piece of the growing pie, the most effective method for many companies is to advertise their products and services through television. In fact according to latest Nielsen research, television ad spending in the country in July-September jumped 25 percent to $1.5 billion.

The second trend is the revival of Indonesian manufacturing. Since 1998, Indonesia’s manufacturing sector has been following a lower growth path compared to that of pre-crisis. However, favorable demographics and a rapidly growing middle class are attracting both domestic and foreign firms to invest in Indonesia.

According to the World Bank, there is a change in the market orientation of Indonesian manufacturing firms from export to domestic.

In addition, the rapid growth of wages in India and China has provided a short-run advantage to Indonesia as global companies are shifting their operations to Indonesia to take advantage of lower labor cost. This has driven industrial property prices to a new height.

Investors can capitalize on this trend by investing in industrial property shares. Although the shares of property companies in the last quarter of 2011 have made a good run-up buoyed by a significant discount to its rising current net asset value, we believe companies such as Alam Sutra (ASRI), Bumi Serpong Damai (BSDE) and SSIA can be accumulated on a meaningful correction.

The third trend is the rising car sales volume as financing becomes widely available and because gross domestic product per capita has risen at a compounded average of 12.6 percent annually in the past five years.

Although there will be a short-term hiccup as the government is planning to start ending fuel subsidies for private cars this year, we believe the secular trend of strong growth for car industry to remain intact.

Drawing from the experience from 2006 fuel price adjustment, the sales volume temporarily dipped in 2007, but made a significant come back in 2008 as the rise in GDP per capita eclipsed the hike in fuel cost.

In line with the bright prospect, the shares of Indomobil Sukses International (IMAS) and Astra International (ASII) have increased significant in the last four months.

In that light, we like several automotive spare-parts manufacturers that are still undervalued and we think they will be able to reap the benefit of this trend. Astra Atoparts (AUTO) and Selamat Sempurna (SMSM) can be accumulated to ride this trend.

Lastly, I think there is a reasonable probability that multi-finance firms that focus on motorcycle financing might have a difficult time ahead.

There are signs of increasing distress in their portfolio quality as the rate of default increases.

Fraud could potentially be rampant because buyers can get financing for a motorcycle with only Rp 500,000 ($56) as a down-payment. I am confident that most of the repossessed units are not in perfect condition. Consequently, I would stay clear of any highly leveraged multi-finance firms especially those with large portfolio of motorcycle loans.

Jeffrosenberg Tan is the head of research at Sinarmas Sekuritas.