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.

Macroeconomics

<ul><li>Market review: JCI ended the week up 0.7% w-w, outperforming majority of EM peers.</li><li>Amid negative performances from the big sectors (Banks +0.5%, Telco -2.5% Consumer Staples -1.8% w-w), JCI’s positive return for the week was driven by Oil &amp; Gas (+10.6% w-w), Cement (+7.8% w-w) and Industrial Estate (+4.6% w-w).</li><li>In line with the majority of EM peers, foreign investors flow into JCI was a net positive (US$80mn), with mixed flows into large-cap banks (except for BBRI), TLKM, and metals (ANTM and BRMS). </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.

Market review: JCI ended the week up 0.7% w-w, outperforming majority of EM peers.Amid negative performances from the big sectors (Banks +0.5%, Telco -2.5% Consumer Staples -1.8% w-w), JCI’s positive return for the week was driven by Oil &amp; Gas (+10.6% w-w), Cement (+7.8% w-w) and Industrial Estate (+4.6% w-w).In line with the majority of EM peers, foreign investors flow into JCI was a net positive (US$80mn), with mixed flows into large-cap banks (except for BBRI), TLKM, and metals (ANTM and BRMS). 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.

BRIDS Market Pulse: Chart of the Week – Telco Sector 5-Year EV/EBITDA

Thematic (Sector/Industry)

<ul><li>Bank valuations have derated, but PBV valuations have yet to hit bottom in the past two downcycles, i.e., 2015-2016 and 2019-2020.</li><li>We see banks continuing to face asset quality risk and tight liquidity, with persistent foreign outflows and local fund position still elevated.</li><li>Maintain Neutral rating on the sector with BBCA as our top pick, followed by BTPS and BRIS given their better CoF and NPL outlooks.</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.

Bank valuations have derated, but PBV valuations have yet to hit bottom in the past two downcycles, i.e., 2015-2016 and 2019-2020.We see banks continuing to face asset quality risk and tight liquidity, with persistent foreign outflows and local fund position still elevated.Maintain Neutral rating on the sector with BBCA as our top pick, followed by BTPS and BRIS given their better CoF and NPL outlooks.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.

Banks: Beware of Catching the Falling Knives (NEUTRAL)

<ul><li>Market: JCI closed the week at -0.8% wow, faring better than ASEAN EM markets, which experienced a notable underperformance on the back of concerns on economic growth.</li><li>Foreign investors were a net seller in JCI (-US$6.2mn, all market) and across EMs.</li><li>We noted a mixed flows in banking sector, with net buys in BBRI and BBNI and net sells in BBCA and BMRI, indicating a shift toward high-beta banking stocks amid the recent BI rate cut. </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.

Market: JCI closed the week at -0.8% wow, faring better than ASEAN EM markets, which experienced a notable underperformance on the back of concerns on economic growth.Foreign investors were a net seller in JCI (-US$6.2mn, all market) and across EMs.We noted a mixed flows in banking sector, with net buys in BBRI and BBNI and net sells in BBCA and BMRI, indicating a shift toward high-beta banking stocks amid the recent BI rate cut. 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.

BRIDS Market Pulse: Chart of the Week – Copper Vs DXY

<ul><li>An early rate cut may ease liquidity pressure faster, while some loans and marketable securities are at risk of lower yield. </li><li>Banking sector share prices have a high negative correlation with USD/IDR, which could put the sector under selling pressure once again.</li><li>Share price rally provides a window to neutralize position amid our concern on asset quality. We maintain our Neutral rating.</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.

An early rate cut may ease liquidity pressure faster, while some loans and marketable securities are at risk of lower yield. Banking sector share prices have a high negative correlation with USD/IDR, which could put the sector under selling pressure once again.Share price rally provides a window to neutralize position amid our concern on asset quality. We maintain our Neutral rating.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.

Banks: Liquidity May Ease Faster, but Stable Rupiah Is Needed for the Rally to Sustain (NEUTRAL)

<ul><li>We expect a moderate earnings growth of 5.8% in FY25F (from 6.7% in FY24F) due to slower loan growth, still tight liquidity, and higher CoC.</li><li>In our view, the biggest risk is higher delinquency as liquidity remains tight, and we expect MSME quality to remain at risk.</li><li>We lowered the sector’s rating to Neutral amid our cautious FY25F outlook, with BBCA remaining as our top pick.</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.

We expect a moderate earnings growth of 5.8% in FY25F (from 6.7% in FY24F) due to slower loan growth, still tight liquidity, and higher CoC.In our view, the biggest risk is higher delinquency as liquidity remains tight, and we expect MSME quality to remain at risk.We lowered the sector’s rating to Neutral amid our cautious FY25F outlook, with BBCA remaining as our top pick.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.

Banks: FY25 Outlook: Less money to lend, save, and repay (NEUTRAL)

Indonesia

PT Bank Negara Indonesia (Persero) Tbk is a state-owned bank that conducts commercial and consumer banking services.

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Bank Negara Indonesia Persero (BBNI IJ)

BRIDS Market Pulse: Chart of the Week – Telco Sector 5-Year EV/EBITDA

The week’s positive performance brought JCI to a 1.2% YTD increase, better than majority of ASEAN EM peers, while foreign investors were still at...

BRI Danareksa Research

Banks: Beware of Catching the Falling Knives (NEUTRAL)

Bank valuations have derated, but PBV valuations have yet to hit bottom in the past two downcycles, i.e., 2015-2016 and 2019-2020.

BRI Danareksa Research

BRIDS Market Pulse: Chart of the Week – Copper Vs DXY

Market: JCI closed the week at -0.8% wow, faring better than ASEAN EM markets, which experienced a notable underperformance on the back of concerns...

BRI Danareksa Research

Banks: Liquidity May Ease Faster, but Stable Rupiah Is Needed for the Rally to Sustain (NEUTRAL)

An early rate cut may ease liquidity pressure faster, while some loans and marketable securities are at risk of lower yield.

BRI Danareksa Research

Banks: FY25 Outlook: Less money to lend, save, and repay (NEUTRAL)

We expect a moderate earnings growth of 5.8% in FY25F (from 6.7% in FY24F) due to slower loan growth, still tight liquidity, and higher CoC.

BRI Danareksa Research

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