With national elections around the corner, Jokowi seems to be backtracking on his reform agenda with a string of populist measures. Jokowi plans to keep electricity tariffs and fuel prices unchanged over the next two years by hiking energy subsidies in draft state budget 2019.
Although have been aggressively adjust the time deposit pricing, the effect on bottom line is manageable as time deposit does not dominate the big banks’ book. Certain smaller banks, such as BBTN would also have better protection again NIM pressure as sizeable portion of their lending is...
New contracts could improve in 2H18 as the acceleration in infrastructure project will be faster in 2H due to the backend loading of infra-spending. Moreover, contractors under our coverage still book higher earnings growth in 2Q18 by 68% on average.
OPEC has faced some difficulties balancing the market due to unexpected supply disruptions within the OPEC, especially for Venezuela and Libya.
The residential property market is relatively in at better state compared to other subsectors as the growth in house prices were more sustainable at aggregate 3.3% YoY in 2Q18 and according to BI prediction will maintain at 3.3% in 3Q18.
The Bloomberg survey showed most economists expect only 25 bps FFR hike in 2019 to 2.50% - 2.75% (see exhibit 2).