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Jaminan Sosial Tenaga Kerja, Indonesia’s national pension fund, is bearish on the nation’s commodity stocks as slowing global growth may curb exports from the world’s biggest supplier of thermal coal, palm oil and tin.

Mining and plantation shares may underperform the Jakarta Composite index in 2012 as Europe’s debt crisis threatens demand for raw materials, said Elvyn Masassya, investment director at Jamsostek, as Indonesia’s biggest fund is known. Banking and consumer stocks may gain as domestic spending increases, helping the benchmark index to rise as much as 15 percent to 4,400 by the end of 2012, said Masassya, who manages about $12 billion in assets. The measure rose 1.3 percent to close at 3,857.88 on Tuesday.

“It’s hard for commodity share prices to gain,” Masassya said in an interview in Jakarta on Thursday. “Commodity-based companies will still be impacted by what’s going on in Europe.”

A measure of Indonesian mining stocks slid 23 percent last year, the worst performer among the benchmark index’s nine industry groups, after export growth slowed and importers of coal and palm oil such as China and India raised interest rates to tame inflation.

Mining stocks trade at 9.3 times estimated earnings compared with 12.8 times for shares on the Jakarta Composite, which rose 3.2 percent last year, the third-best performer in Asia. The broader gauge climbed as the nation’s economy expanded at the fastest pace in 15 years.

Jamsostek plans to allocate about 20 percent of its assets for equities this year, the same as in 2011, Masassya said. The pension fund is estimated to have returned 11.8 percent last year, with the equities portion climbing around 17 percent, he said. Total assets under management may rise to 125 trillion rupiah ($14 billion) by the end of this year, he said.

Gains for commodities are likely to be limited in 2012 as “risks to global growth are skewed to the downside,” Morgan Stanley said in a Nov. 30 report.

Two years of European summits have failed to contain a debt crisis that has led to bailouts of Greece, Ireland and Portugal and now threatens Italy and Spain. The euro-area economy is likely to slip back into a recession and its leaders’ new plan to end the crisis hasn’t completely eliminated the risk of a breakup of the currency region, Ernst & Young said Dec. 15. The economy of the 17 nations using the euro will probably shrink in coming quarters, it said.

Indonesia’s non-oil and gas exports in November dropped 1.1 percent from a month earlier, according to the nation’s central statistics office. Europe was the second-largest market for the shipments that month, data from the statistics office show.

Indonesia is the world’s second-biggest rubber producer and the third-largest cocoa producer. Palm oil futures declined 16 percent last year, while rubber dropped 36 percent and cocoa fell 31 percent. The country cut its benchmark for December coal sales to $112.67 a metric ton on Dec. 7, the lowest price in 11 months.

Yudhistia Susanto, who helps manage about $3.8 billion in asset at Manulife Asset Management in Jakarta, said any losses for mining stocks will be “limited.”

“Most of the energy-related mining stocks have already reached their fair values,” Susanto said in a Dec. 23 interview. “If we don’t see another crash in commodity prices, the downside of mining stocks is limited.”

Bumi Resources, Asia’s largest exporter of thermal coal, fell 28 percent last year, driving estimated profit to 11.2 times, compared with a four-year average of 12.3 times. Bumi said Dec. 30 it expects revenue rose 35 percent in 2011 and forecasts the coal market to strengthen on rising demand from India, Indonesia and China.

While commodity stocks may extend losses for a second year, companies that benefit from Indonesia’s consumption growth will likely rise, Jamsostek’s Masassya said. Domestic consumption accounted for about 54 percent of gross domestic product in the third quarter, according to the statistics office.

“It’s the domestic story that will drive the market,” Masassya said. “People’s purchasing power is increasing.”

Indonesia’s central bank estimated Southeast Asia’s biggest economy expanded 6.5 percent last year, the fastest pace since 1996, while interest rates are at a record low. Overseas purchases of Indonesian equities rose 22 percent in 2011 to a net $2.85 billion from a year earlier, according to data compiled by Bloomberg.

Masassya likes banks, consumer and infrastructure-related stocks, saying Indonesia’s debt rating upgrade to investment level last month by Fitch Ratings should boost capital inflows and investment spending.

“The situation in Europe isn’t over yet,” Masassya said. “But with Indonesia’s investment grade and coupled with a strong domestic economy, we believe there will still be growth for equities in 2012.”

Bloomberg