Market Outlook 2022: Equity Strategy

The JCI index, having lagged peers in 2020 with a 5.1% decline, played catch-up rising by 8.8% to highest monthly level of  6,505 on 21-Jan-21. 

Market Outlook 2022: Banking Sector

After posting a significant decline in 2020 at -36% YoY, earnings for banks under our coverage continues to recover as we expect a 44% YoY in 2021F. 

Fund Performance

Market Outlook 2022: Telco Sector

Telecommunication (telecom) sector has been in talks for industry consolidation for a while. The last major M&A was happening back in 2013-2014 between EXCL and Axis and it has yet resulted in the ideal level of competitive landscape.

Market Outlook 2022: Construction Sector

SOE contractors under our coverage reported weaker-than-expected net profit for 2Q21 and 1H21. 1H21 earnings only met 18.1% of our 2021F as compared to historical range of 28-42%.

Market Outlook 2022: Plantation Sector

In recent years, Indonesia’s biodiesel production has increased due to national biodiesel program, financed by the CPO fund to support biodiesel producers. 

Market Outlook 2022: Property Sector

Residential sales in the primary market experienced a deep contraction in 2020. The declining property sales affected all types of residence, most significantly large houses.

Market Outlook 2022: Metal Mining Sector

Despite bearing the brunt of China’s energy crisis caused by inflating coal and oil prices, nickel prices have surprisingly remained resilient increasing by 19% Ytd to USD19,739/ton and LME nickel inventory continued declining by 42% to 142 k wmt.

Market Outlook 2022: Coal Sector

Despite entering what is usually weak coal season demand, Newcastle coal price have shown little signs of losing its steam jumping 181% YtD to USD226/ton (301% YoY).

Market Outlook 2022: Healthcare Sector

Indonesian government sets Rp255.3 tn of healthcare budget allocation in 2022 (-21.7% YoY), which is 9.4% of the state budget. This consist of Rp139.4 tn regular healthcare budget (+11.3% YoY), and Rp115.9 tn PEN (covid-19) budget (-42.4% YoY).

Market Outlook 2022: Retail Sector

According to google mobility index as of the 3^rd week of October, Indonesia mobility data on retail and recreational area was around 3% above the base line.

Market Outlook 2022: Consumer Sector

Heading to 2022F, we believe in order to achieve sustainable recovery in consumer buying power will require higher vaccinations rate to curb any potential mobility restrictions in the future.

ECONOMIC UPDATE - BoP review - Current account thick surplus

In 3Q21, current account balance posted the biggest surplus in 12 years at USD4.47 bn (1.49% of GDP) reversing the deficit at USD1.97 bn in 1Q21 (-0.45% of GDP). The thick current account surplus sends positive sentiment that Indonesia’s external resilience remains solid heading to the...

ECONOMIC UPDATE - External trade review - All-time high surplus

Statistics Indonesia reported an all-time high trade surplus at USD5.74 bn in Oct-21. We expect the high commodity prices condition will likely continue until the YE 2021 as Indonesia benefit from the energy crunch that is happening in developed countries.