Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>With the IDR stabilizing and inflation abating to 2.5%YoY in Jun'24, we expect a 25bp cut in the policy rate in the Jul-Sep'24 quarter. This should bolster hitherto-weak private consumption. </li>
<li>The fiscal deficit was a modest 2.2% of GDP in Apr'23-Mar'24; 'Prabowo risk' won't be manifest until 2025. Until then, liquid banks (L-D ratio 86.5%) are well-positioned to drive growth. </li>
<li>At 11.75x, the equity market's trailing P/E ratio is far below its 20-year mean of 16.16x. Given the stable macro backdrop, we recommend going Overweight Indonesian equities. </li>
</ul>


With the IDR stabilizing and inflation abating to 2.5%YoY in Jun'24, we expect a 25bp cut in the policy rate in the Jul-Sep'24 quarter. This should bolster hitherto-weak private consumption. 
The fiscal deficit was a modest 2.2% of GDP in Apr'23-Mar'24; 'Prabowo risk' won't be manifest until 2025. Until then, liquid banks (L-D ratio 86.5%) are well-positioned to drive growth. 
At 11.75x, the equity market's trailing P/E ratio is far below its 20-year mean of 16.16x. Given the stable macro backdrop, we recommend going Overweight Indonesian equities. 


Indonesia: Macro Stability and Attractive Valuations Create a Buying Opportunity

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>With <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota (7203 JP)</a> having sold some of its stake in <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso</a>, <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI</a> and <a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive</a> this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.</li>
<li>Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


With Toyota (7203 JP) having sold some of its stake in Denso, KDDI and Harmonic Drive this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.
Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jardine-cycle-carriage-ltd" target="_blank" data-smartkarma-citation="entities:347:1" rel="noopener">Jardine Cycle &amp; Carriage (JCNC SP)</a>'s current implied stub value is around its highest-ever level.</li>
<li>The simple ratio of JCNC/<a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a> is around its highest level outside the 2008 GFC.</li>
<li>A weak Indonesian rupiah is likely a factor. Still, JCNC is trading rich to its NAV. A takeover from parent <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a> is idealistic.</li>
</ul>



Jardine Cycle &amp; Carriage (JCNC SP)'s current implied stub value is around its highest-ever level.
The simple ratio of JCNC/Astra International (ASII IJ) is around its highest level outside the 2008 GFC.
A weak Indonesian rupiah is likely a factor. Still, JCNC is trading rich to its NAV. A takeover from parent Jardine Matheson Holdings (JM SP) is idealistic.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/jardine-cycle-carriage-ltd" target="_blank" data-smartkarma-citation="entities:347:1" rel="noopener">Jardine Cycle &amp; Carriage (JCNC SP)</a> is currently trading at a ~12% discount to NAV, just outside its narrowest post-Covid.</li>
<li>A key catalyst for the recent narrowing was JCNC's inclusion in the SIMSCI Index at the end of last month.</li>
<li>JCNC is expensive here - relative to historical values -  and from an implied stub perspective.</li>
</ul>



Jardine Cycle &amp; Carriage (JCNC SP) is currently trading at a ~12% discount to NAV, just outside its narrowest post-Covid.
A key catalyst for the recent narrowing was JCNC's inclusion in the SIMSCI Index at the end of last month.
JCNC is expensive here - relative to historical values -  and from an implied stub perspective.


External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

Thematic (Sector/Industry)

<ul><li>Manufacturing-led FDI now anchors investment growth, lifting GFCF and widening regional benefit with Ex-Java areas benefiting the most.</li><li>Despite rising manufacturing-led FDI, investment momentum is soft. Capex cycle, utilisation, and minimum wages are key factors to watch.</li><li>Wage growth tracks investment in productive regions, highlighting the need to shift UMR rules toward productivity-based, region-specific.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Manufacturing-led FDI now anchors investment growth, lifting GFCF and widening regional benefit with Ex-Java areas benefiting the most.Despite rising manufacturing-led FDI, investment momentum is soft. Capex cycle, utilisation, and minimum wages are key factors to watch.Wage growth tracks investment in productive regions, highlighting the need to shift UMR rules toward productivity-based, region-specific.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Macro Strategy: 2026: Reassessing the Investment Cycle

Indonesia

PT Astra International Tbk assembles and distributes automobiles, motorcycles, and their related spare parts.  Through its subsidiaries, the Company also operates in the mining, development of plantations, financial and information technology.

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Astra International (ASII IJ)

Indonesia: Macro Stability and Attractive Valuations Create a Buying Opportunity

Equity valuations (11.75x trailing PER) are attractive (vs 20yr mean of 16.2x). Shrinking CAD helps stabilize IDR, likely allowing a rate cut this...

Prasenjit K. Basu

Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Toyota, Toyota Industries and Denso are tag teaming to unwind some of their stake in Aisin, in a deal worth over US$1bn. While the timing of the...

Sumeet Singh

Jardine Cycle & Carriage Is A Short

Jardine Cycle & Carriage's premium to NAV is not justifiable. I'd look to reverse the stub here - Short JCNC, Long Astra.

David Blennerhassett

JCNC Is Still Overstretched Vs. Astra

JCNC is expensive here - relative to historical values - and from an implied stub perspective. And the MSCI inclusion event has now passed. I'd...

David Blennerhassett

Macro Strategy: 2026: Reassessing the Investment Cycle

Manufacturing-led FDI now anchors investment growth, lifting GFCF and widening regional benefit with Ex-Java areas benefiting the most.

BRI Danareksa Research

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