ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

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

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> continues to prove its metal releasing a strong set of 9M2020 results, which saw an across the board improvement in margins, despite a decline in sales.  </p>
<p>This was achieved by healthy contributions from all businesses, strict operating expenses control, tight Working Capital Management, together with lower leverage.</p>
<p>Petroleum volumes remained very healthy, with an increasingly diverse customer mix, whilst chemical volumes were slower given its more economically sensitive. </p>
<p>The company's JIIPE industrial estate (Jakarta Integrated Industrial and Port Estate) saw further land sales but we should expect further plot sales in 4Q2020 and a much higher number in 2021. </p>
<p>The <a href="https://www.smartkarma.com/entities/freeport-mcmoran-inc" target="_blank" data-smartkarma-citation="entities:12491:1" rel="noopener">Freeport Mcmoran (FCX US)</a> smelter is making progress with <a href="https://www.smartkarma.com/entities/chiyoda-corp" target="_blank" data-smartkarma-citation="entities:6232:1" rel="noopener">Chiyoda Corp (6366 JP)</a> appointed as EPC contractor and lease payments coming through on schedule. </p>
<p><a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a>'s retail petroleum JV with <a href="https://www.smartkarma.com/entities/bp-plc" target="_blank" data-smartkarma-citation="entities:21847:1" rel="noopener">BP PLC (BP/ LN)</a> is recovering with expectations of higher growth in 2021 and 2022. </p>
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<p><strong><a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a></strong> trades on 11.0x FY21E PER versus its 3-year average forward PER of 15.8x, with the expectation of +16.2% EPS growth in FY21E.  This is an interesting <strong>proxy for Indonesia's economic recovery</strong>, as well as a play on the potential pick-up in <strong>foreign investment on the back of the passage of the Omnibus Law. </strong></p>
</div>

AKR Corporindo (AKRA IJ) continues to prove its metal releasing a strong set of 9M2020 results, which saw an across the board improvement in margins, despite a decline in sales.  
This was achieved by healthy contributions from all businesses, strict operating expenses control, tight Working Capital Management, together with lower leverage.
Petroleum volumes remained very healthy, with an increasingly diverse customer mix, whilst chemical volumes were slower given its more economically sensitive. 
The company's JIIPE industrial estate (Jakarta Integrated Industrial and Port Estate) saw further land sales but we should expect further plot sales in 4Q2020 and a much higher number in 2021. 
The Freeport Mcmoran (FCX US) smelter is making progress with Chiyoda Corp (6366 JP) appointed as EPC contractor and lease payments coming through on schedule. 
AKR Corporindo (AKRA IJ)'s retail petroleum JV with BP PLC (BP/ LN) is recovering with expectations of higher growth in 2021 and 2022. 

AKR Corporindo (AKRA IJ) trades on 11.0x FY21E PER versus its 3-year average forward PER of 15.8x, with the expectation of +16.2% EPS growth in FY21E.  This is an interesting proxy for Indonesia's economic recovery, as well as a play on the potential pick-up in foreign investment on the back of the passage of the Omnibus Law. 


AKR Corporindo (AKRA IJ) - Great Omnibus Expectations

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<p>In our Macro Overview of Global fund positioning, we cover the following: </p><ul>
<li>Managers raise EMEA Overweight, hit max underweight in US.</li>
<li>Taiwan key beneficiary of COVID rebalance, India sees outflows.</li>
<li>Cross country exodus seen in Financials/Energy.  Materials reverse long-term decline.</li>
<li>Active managers move towards defensive and secular growth sectors and out of cyclicals.</li>
<li>UK Energy stocks see decline, Dutch Tech stocks continue to attract new investment.</li>
</ul><p><em>Taken from our Global fund analysis, covering 391 active global funds with combined AUM of $800bn.</em></p>

In our Macro Overview of Global fund positioning, we cover the following: 
Managers raise EMEA Overweight, hit max underweight in US.
Taiwan key beneficiary of COVID rebalance, India sees outflows.
Cross country exodus seen in Financials/Energy.  Materials reverse long-term decline.
Active managers move towards defensive and secular growth sectors and out of cyclicals.
UK Energy stocks see decline, Dutch Tech stocks continue to attract new investment.
Taken from our Global fund analysis, covering 391 active global funds with combined AUM of $800bn.

Global Equity Positioning:  Macro Overview.  Raising EU Overweights, Taiwan Vs India, UK Decouples

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<p>The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.</p>
<p>Please find a brief summary below, with a fuller write up in the detailed section. We also include in the detailed section the past week's relevant discussions in <a href="mailto:ASEAN@Smartkarma" target="_blank" rel="noopener">ASEAN@Smartkarma</a></p>
</div><h3>Macro Insights</h3><p>In <a href="https://www.smartkarma.com/insights/thai-macro-watch-august-the-new-tech-wars-chinese-flood" target="_blank" data-smartkarma-citation="insights:42012" rel="noopener">Thai Macro Watch (August): The New Tech Wars, Chinese Flood</a>, our Thai guru <a href="https://www.smartkarma.com/profiles/athaporn-arayasantiparb-cfa" target="_blank" data-smartkarma-citation="accounts:766" rel="noopener">Athaporn Arayasantiparb, CFA</a> five global events and their impact on Thai equities.</p><h3>Equity Bottom-Up Insights</h3><p>In <a href="https://www.smartkarma.com/insights/ace-hardware-indonesia-aces-ij-building-a-road-to-recovery" target="_blank" data-smartkarma-citation="insights:42520" rel="noopener">Ace Hardware Indonesia (ACES IJ) - Building A Road to Recovery,</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits one of Indonesia's leading retailers after a call with management.</p><p>In <a href="https://www.smartkarma.com/insights/akr-corporindo-akra-ij-the-landed-logistics-player" target="_blank" data-smartkarma-citation="insights:42569" rel="noopener">AKR Corporindo (AKRA IJ) - The Landed Logistics Player,</a><a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" data-smartkarma-citation="accounts:937" rel="noopener">Angus Mackintosh</a> revisits this Indonesian chemical and fuel distributor with an increasing contribution coming from its JIIPE industrial estate. </p><p>In <a href="https://www.smartkarma.com/insights/sats-from-serving-22-5m-pax-in-1q20-to-serving-200k-pax-in-1q21-houston-we-have-a-problem" target="_blank" data-smartkarma-citation="insights:42488" rel="noopener">SATS: From Serving 22.5M Pax in 1Q20 -&gt; To Serving 200K Pax in 1Q21. Houston We Have a Problem.</a> CrossASEAN Insight Provider <a href="https://www.smartkarma.com/profiles/nicolas-van-broekhoven-24a66c2d-bca4-4f5b-adda-c4e2bcc509f4" target="_blank" data-smartkarma-citation="accounts:1208" rel="noopener">Nicolas Van Broekhoven</a> revisits Singapore airport maintenance leader post its recent numbers. </p><p>In <a href="https://www.smartkarma.com/insights/permata-bank-mandatory-takeover-launched-finally" target="_blank" data-smartkarma-citation="insights:42577" rel="noopener">Permata Bank Mandatory Takeover Launched. Finally.</a><a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> revisits the <a href="https://www.smartkarma.com/entities/bank-permata-tbk-pt" target="_blank" data-smartkarma-citation="entities:728:1" rel="noopener">Bank Permata (BNLI IJ)</a> deal as it enters its final stage.</p><p>In <a href="https://www.smartkarma.com/insights/sprime-good-point-of-entry-singha-connection-could-add-further-upside" target="_blank" data-smartkarma-citation="insights:42589" rel="noopener">SPRIME: Good Point of Entry, Singha Connection Could Add Further Upside,</a><a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz, CFA</a> initiates coverage on SPRIME with a BUY recommendation based on a target price of Bt11.20, implying an upside of 21% from the current share price. </p><p>In <a href="https://www.smartkarma.com/insights/aimirt-good-growth-outlook-but-already-priced-in" target="_blank" data-smartkarma-citation="insights:42639" rel="noopener">AIMIRT: Good Growth Outlook, but Already Priced In</a> initiates coverage on <a href="https://www.smartkarma.com/entities/aim-industrial-growth-freehold-and-leasehold-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:29180:1" rel="noopener">AIM Industrial Growth Freehold and Leasehold Real Estate Investment Trust (AIMIRT TB)</a> with a HOLD recommendation based on a target price of Bt14.30, implying an upside of 6% from the current share price. </p><p>In <a href="https://www.smartkarma.com/insights/teamg-cost-savings-and-government-stimulus-to-drive-profit" target="_blank" data-smartkarma-citation="insights:42628" rel="noopener">TEAMG: Cost-Savings and Government Stimulus to Drive Profit,</a><a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz, CFA</a> revisits <a href="https://www.smartkarma.com/entities/team-consulting-engineering-and-management-public-company-limited" target="_blank" data-smartkarma-citation="entities:29175:1" rel="noopener">TEAM Consulting Engineering and Management (TEAMG TB)</a> and maintains a BUY recommendation on the company as he increases the target price to Bt2.81 from Bt2.42, implying an upside of 17% from the current share price. </p><p>In <a href="https://www.smartkarma.com/insights/sisb-good-entry-point-for-investment-in-private-schools" target="_blank" data-smartkarma-citation="insights:42632" rel="noopener">SISB: Good Entry Point for Investment in Private Schools,</a><a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz, CFA</a> initiates coverage on SPRIME with a BUY recommendation based on a target price of Bt11.20, implying an upside of 21% from the current share price.</p><p>In <a href="https://www.smartkarma.com/insights/sflex-staying-behind-key-players-in-the-market" target="_blank" data-smartkarma-citation="insights:42679" rel="noopener">SFLEX: Staying Behind Key Players in the Market,</a><a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz, CFA</a> initiates coverage on <a href="https://www.smartkarma.com/entities/starflex-pcl" target="_blank" data-smartkarma-citation="entities:29172:1" rel="noopener">Starflex PCL (SFLEX TB)</a> with a SELL recommendation based on a target price of Bt8.90, implying a downside of 28% from the current price. </p><p>In <a href="https://www.smartkarma.com/insights/boffice-asset-expansion-motivates-the-upside" target="_blank" data-smartkarma-citation="insights:42678" rel="noopener">BOFFICE: Asset Expansion Motivates the Upside,</a><a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz, CFA</a> initiates coverage on <a href="https://www.smartkarma.com/entities/bhiraj-office-leasehold-reit" target="_blank" data-smartkarma-citation="entities:29173:1" rel="noopener">Bhiraj Office Leasehold REIT (BOFFICE TB)</a> with a BUY recommendation based on a target price of Bt14.10, implying an upside of 18% from the current share price. </p><p>In <a href="https://www.smartkarma.com/insights/all-valuation-remains-undemanding-expect-further-upside" target="_blank" data-smartkarma-citation="insights:42635" rel="noopener">ALL: Valuation Remains Undemanding, Expect Further Upside</a>, <a href="https://www.smartkarma.com/profiles/dr-andrew-stotz-cfa" target="_blank" data-smartkarma-citation="accounts:756" rel="noopener">Dr Andrew Stotz, CFA</a> revisits <a href="https://www.smartkarma.com/entities/all-inspire-development-pcl" target="_blank" data-smartkarma-citation="entities:29177:1" rel="noopener">All Inspire Development PCL (ALL TB),</a> where he has a Buy recommendation based on a target price of Bt4.39, implying an upside of 31% from the current price. </p><p>In <a href="https://www.smartkarma.com/insights/m-rapid-sssg-recovery-with-potential-growth-from-seafood-restaurant" target="_blank" data-smartkarma-citation="insights:42578" rel="noopener">M: Rapid SSSG Recovery with Potential Growth from Seafood Restaurant,</a> our friends at <a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> circle back to <a href="https://www.smartkarma.com/entities/mk-restaurants-group-pcl" target="_blank" data-smartkarma-citation="entities:17689:1" rel="noopener">MK Restaurants Group (M TB)</a> after attending the recent analyst briefing, where they came away more positive with signs of an SSSG recovery post lockdown easing.</p><p>In <a href="https://www.smartkarma.com/insights/egco-positive-2h20-earnings-outlook-from-better-overseas-performance" target="_blank" data-smartkarma-citation="insights:42634" rel="noopener">EGCO: Positive 2H20 Earnings Outlook from Better Overseas Performance,</a><a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> revisit <a href="https://www.smartkarma.com/entities/electricity-generating-pcl" target="_blank" data-smartkarma-citation="entities:6149:1" rel="noopener">Electricity Generating (EGCO TB)</a> after the company's positive analyst briefing. </p><p>In <a href="https://www.smartkarma.com/insights/wice-expect-earnings-to-continue-growing-yoy-in-2h20" target="_blank" data-smartkarma-citation="insights:42537" rel="noopener">WICE: Expect Earnings to Continue Growing YoY in 2H20,</a><a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> circle back to <a href="https://www.smartkarma.com/entities/wice-logistics-pcl" target="_blank" data-smartkarma-citation="entities:26172:1" rel="noopener">Wice Logistics (WICE TB)</a> after going to the company's analyst briefing. </p><p>In <a href="https://www.smartkarma.com/insights/hana-covid-19-impact-has-passed" target="_blank" data-smartkarma-citation="insights:42575" rel="noopener">HANA: Covid-19 Impact Has Passed,</a><a href="https://www.smartkarma.com/companies/country-group" target="_blank" data-smartkarma-citation="companies:965" rel="noopener">Country Group</a> revisits one of Thailand's leading electronics manufacturing services companies. </p><h3>Sector and Thematic Insights</h3><p>In <a href="https://www.smartkarma.com/insights/indonesia-banks-most-to-recover" target="_blank" data-smartkarma-citation="insights:42493" rel="noopener">Indonesia Banks – Most To Recover?,</a> banking specialist <a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" data-smartkarma-citation="accounts:12" rel="noopener">Daniel Tabbush</a> zooms in on the potential recovery to come for Indonesian Banks. </p><div><div><div id="ember9100"><div><section><div id="ember9112"><div><p>In <a href="https://www.smartkarma.com/insights/asia-banks-oversized-dividends" target="_blank" data-smartkarma-citation="insights:42535" rel="noopener">Asia Banks – Oversized Dividends,</a><a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" data-smartkarma-citation="accounts:12" rel="noopener">Daniel Tabbush</a> zeros in on dividend payments for Asian banks during the pandemic period. </p></div></div></section></div></div></div></div><h3>Credit Insights</h3><p>In <a href="https://www.smartkarma.com/insights/bank-rakyat-indonesia-pondering-pricing-on-a-promised-new-issue" target="_blank" data-smartkarma-citation="insights:42524" rel="noopener">Bank Rakyat Indonesia: Pondering Pricing on a Promised New Issue</a><a href="https://www.smartkarma.com/profiles/hank-calenti-cfa" target="_blank" data-smartkarma-citation="accounts:5194" rel="noopener">Hank Calenti, CFA</a> takes a look at the proposed US$1bn bond issue from <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia Persero (BBRI IJ)</a> and finds it appealing. <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia Persero (BBRI IJ)</a> could price a potential five-year senior unsecured </p>


The week that was in ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up and credit insights over the past week.
Please find a brief summary below, with a fuller write up in the detailed section. We also include in the detailed section the past week's relevant discussions in ASEAN@Smartkarma
Macro InsightsIn Thai Macro Watch (August): The New Tech Wars, Chinese Flood, our Thai guru Athaporn Arayasantiparb, CFA five global events and their impact on Thai equities.Equity Bottom-Up InsightsIn Ace Hardware Indonesia (ACES IJ) - Building A Road to Recovery, CrossASEAN Insight Provider Angus Mackintosh revisits one of Indonesia's leading retailers after a call with management.In AKR Corporindo (AKRA IJ) - The Landed Logistics Player,Angus Mackintosh revisits this Indonesian chemical and fuel distributor with an increasing contribution coming from its JIIPE industrial estate. In SATS: From Serving 22.5M Pax in 1Q20 -&gt; To Serving 200K Pax in 1Q21. Houston We Have a Problem. CrossASEAN Insight Provider Nicolas Van Broekhoven revisits Singapore airport maintenance leader post its recent numbers. In Permata Bank Mandatory Takeover Launched. Finally.Travis Lundy revisits the Bank Permata (BNLI IJ) deal as it enters its final stage.In SPRIME: Good Point of Entry, Singha Connection Could Add Further Upside,Dr Andrew Stotz, CFA initiates coverage on SPRIME with a BUY recommendation based on a target price of Bt11.20, implying an upside of 21% from the current share price. In AIMIRT: Good Growth Outlook, but Already Priced In initiates coverage on AIM Industrial Growth Freehold and Leasehold Real Estate Investment Trust (AIMIRT TB) with a HOLD recommendation based on a target price of Bt14.30, implying an upside of 6% from the current share price. In TEAMG: Cost-Savings and Government Stimulus to Drive Profit,Dr Andrew Stotz, CFA revisits TEAM Consulting Engineering and Management (TEAMG TB) and maintains a BUY recommendation on the company as he increases the target price to Bt2.81 from Bt2.42, implying an upside of 17% from the current share price. In SISB: Good Entry Point for Investment in Private Schools,Dr Andrew Stotz, CFA initiates coverage on SPRIME with a BUY recommendation based on a target price of Bt11.20, implying an upside of 21% from the current share price.In SFLEX: Staying Behind Key Players in the Market,Dr Andrew Stotz, CFA initiates coverage on Starflex PCL (SFLEX TB) with a SELL recommendation based on a target price of Bt8.90, implying a downside of 28% from the current price. In BOFFICE: Asset Expansion Motivates the Upside,Dr Andrew Stotz, CFA initiates coverage on Bhiraj Office Leasehold REIT (BOFFICE TB) with a BUY recommendation based on a target price of Bt14.10, implying an upside of 18% from the current share price. In ALL: Valuation Remains Undemanding, Expect Further Upside, Dr Andrew Stotz, CFA revisits All Inspire Development PCL (ALL TB), where he has a Buy recommendation based on a target price of Bt4.39, implying an upside of 31% from the current price. In M: Rapid SSSG Recovery with Potential Growth from Seafood Restaurant, our friends at Country Group circle back to MK Restaurants Group (M TB) after attending the recent analyst briefing, where they came away more positive with signs of an SSSG recovery post lockdown easing.In EGCO: Positive 2H20 Earnings Outlook from Better Overseas Performance,Country Group revisit Electricity Generating (EGCO TB) after the company's positive analyst briefing. In WICE: Expect Earnings to Continue Growing YoY in 2H20,Country Group circle back to Wice Logistics (WICE TB) after going to the company's analyst briefing. In HANA: Covid-19 Impact Has Passed,Country Group revisits one of Thailand's leading electronics manufacturing services companies. Sector and Thematic InsightsIn Indonesia Banks – Most To Recover?, banking specialist Daniel Tabbush zooms in on the potential recovery to come for Indonesian Banks. In Asia Banks – Oversized Dividends,Daniel Tabbush zeros in on dividend payments for Asian banks during the pandemic period. Credit InsightsIn Bank Rakyat Indonesia: Pondering Pricing on a Promised New IssueHank Calenti, CFA takes a look at the proposed US$1bn bond issue from Bank Rakyat Indonesia Persero (BBRI IJ) and finds it appealing. Bank Rakyat Indonesia Persero (BBRI IJ) could price a potential five-year senior unsecured 

The Week that Was in ASEAN@Smartkarma - Ace Hardwear, Thai Macro, and Indonesian Banks

<p><a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> continues to see strong share price performance, given it has demonstrated its resilience of both its core chemical and fuel distribution business, as well as the attractiveness of its Java Integrated Industrial and Port Estate (JIIPE) industrial estate at Gresik north of Surabaya, which has continued to book new sales and has a strong pipeline ahead. </p>
<p>The news last week that <a href="https://www.smartkarma.com/entities/freeport-mcmoran-inc" target="_blank" data-smartkarma-citation="entities:12491:1" rel="noopener">Freeport Mcmoran (FCX US)</a> has signed an engineering and procurement contract (EPC) with <a href="https://www.smartkarma.com/entities/chiyoda-co-ltd" target="_blank" data-smartkarma-citation="entities:6461:1" rel="noopener">Chiyoda Co Ltd (8185 JP)</a> for its smelter project at JIIPE should be a further positive catalyst for <a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ),</a> as it confirms Freeport's commitment to the project.</p>
<p>Freeport will invest billions of USD building this smelter and it will need port facilities plus utilities such as power, water, and wastewater treatment facilities. During the construction phase, <a href="https://www.smartkarma.com/entities/chiyoda-co-ltd" target="_blank" data-smartkarma-citation="entities:6461:1" rel="noopener">Chiyoda Co Ltd (8185 JP)</a> will also need land creating further demand.</p>
<p>A lot of downstream and supporting industry will also be increasingly attracted to setting up facilities at JIIPE. Once the smelter is fully built <a href="https://www.smartkarma.com/entities/freeport-mcmoran-inc" target="_blank" data-smartkarma-citation="entities:12491:1" rel="noopener">Freeport Mcmoran (FCX US)</a> would then potentially exercise its option to buy the land, bringing an additional monetary benefit to <a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ).</a></p>
<p>The second half of 2020 should see a pick-up in economic activity in Indonesia, which will benefit volumes in both chemicals and petroleum products, with the tailwind of higher prices. We also expect further land sales at JIIPE to be booked in 2H2020. </p>
<div class="content-highlight">
<p>The company is a key proxy to the recovery in the Indonesian economy, given the products it distributes oil the wheels of many industries from mining to manufacturing. Its foray into retail fuel distribution through its JV with <a href="https://www.smartkarma.com/entities/bp-plc" target="_blank" data-smartkarma-citation="entities:21847:1" rel="noopener">BP PLC (BP/ LN)</a> will also be a future growth driver.<a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener"> AKR Corporindo (AKRA IJ)</a> continues to trade at a significant discount to its 5-year average forward PER of 16.4x, now trading on 12.6x FY21E. </p>
</div>

AKR Corporindo (AKRA IJ) continues to see strong share price performance, given it has demonstrated its resilience of both its core chemical and fuel distribution business, as well as the attractiveness of its Java Integrated Industrial and Port Estate (JIIPE) industrial estate at Gresik north of Surabaya, which has continued to book new sales and has a strong pipeline ahead. 
The news last week that Freeport Mcmoran (FCX US) has signed an engineering and procurement contract (EPC) with Chiyoda Co Ltd (8185 JP) for its smelter project at JIIPE should be a further positive catalyst for AKR Corporindo (AKRA IJ), as it confirms Freeport's commitment to the project.
Freeport will invest billions of USD building this smelter and it will need port facilities plus utilities such as power, water, and wastewater treatment facilities. During the construction phase, Chiyoda Co Ltd (8185 JP) will also need land creating further demand.
A lot of downstream and supporting industry will also be increasingly attracted to setting up facilities at JIIPE. Once the smelter is fully built Freeport Mcmoran (FCX US) would then potentially exercise its option to buy the land, bringing an additional monetary benefit to AKR Corporindo (AKRA IJ).
The second half of 2020 should see a pick-up in economic activity in Indonesia, which will benefit volumes in both chemicals and petroleum products, with the tailwind of higher prices. We also expect further land sales at JIIPE to be booked in 2H2020. 

The company is a key proxy to the recovery in the Indonesian economy, given the products it distributes oil the wheels of many industries from mining to manufacturing. Its foray into retail fuel distribution through its JV with BP PLC (BP/ LN) will also be a future growth driver. AKR Corporindo (AKRA IJ) continues to trade at a significant discount to its 5-year average forward PER of 16.4x, now trading on 12.6x FY21E. 


AKR Corporindo (AKRA IJ) - The Landed Logistics Player

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

<p><em><strong>The key impact of a Biden presidency will be an initial sell-off in US equities, given that Biden has pledged to raise the corporate tax to 28% (from 21%) and tighten regulation. It will also mean lower oil prices (good for India, Thailand, Korea, Japan), and a medium-term strengthening of global trade with a return to multilateralism, albeit amid a continued shift of global supply chains away from China. Big Oil, Big Pharma, and US insurance will be the losers in a Biden presidency, and global democracies (EU, Japan, India, South Korea) will benefit from his foreign policy. After an initial 5% sell-off in November 2020, and sectoral rebalancing, we expect the liquidity-driven equities rally to resume. </strong></em></p><ul>
<li dir="ltr"><p>With just over 3 months to go for the 3rd November presidential election, former Vice President Joe Biden leads President Trump in key national polls by 8-12 percentage points; the two latest nationwide polls (CBS News/YouGov, and Harvard-Harris) both give Biden a massive 10 percentage point lead. Biden also leads in key battleground states like Michigan (+12 CNN, +6 YouGov), Pennsylvania (+11), Florida (+5), North Carolina (+6) and Arizona (+5) -- all of which Trump won in 2016. Biden's coat-tails are bolstering Democrats across the country, with US Senate races in North Carolina and Arizona (two reliably Republican states over the past 4 decades) leaning strongly Democratic.   </p></li>
<li dir="ltr"><p>The bigger the Biden win, the likelier it is that his coat-tails will flip the Senate to a Democratic majority (there are 23 Republican seats and 12 Democratic ones that are being contested this year; the Democrats need a net gain of 3 seats to have a simple majority in the Senate, 13 seats to have an unlikely filibuster-free majority needed for non-money bills). We expect the polls to tighten after the 3 presidential debates, and in the wake of more well-directed campaign advertisements against Biden (on Hunter/Burisma, the economy, etc.). However, the likelihood is that Biden will win the presidency, and the Democrats will retain the House.  </p></li>
<li dir="ltr"> With Biden likely to raise the corporate tax rate to 28% (from 21% currently) and tighten environmental regulation, equities will sell-off 5% in November 2020. The likely revival of the Iran nuclear deal, tighter regulation of fossil fuels (but no ban on fracking) will be negative for crude-oil prices (and hence for <a href="https://www.smartkarma.com/entities/exxon-mobil-corp" target="_blank" data-smartkarma-citation="entities:811:1" rel="noopener">Exxon Mobil (XOM US)</a> , <a href="https://www.smartkarma.com/entities/chevron-corp" target="_blank" data-smartkarma-citation="entities:11091:1" rel="noopener">Chevron Corp (CVX US)</a> <a href="https://www.smartkarma.com/entities/bp-plc-1317fdd3-d03a-435f-85b8-c8d67125bc3a" target="_blank" data-smartkarma-citation="entities:27921:1" rel="noopener">BP PLC (BP US)</a> and <a href="https://www.smartkarma.com/entities/royal-dutch-shell-plc" target="_blank" data-smartkarma-citation="entities:22108:1" rel="noopener">Royal Dutch Shell (RDSA LN)</a> ) -- and good news for Asian oil importers like India, Thailand, South Korea and Japan. The return to a more multilateral approach to trade negotiations will help a medium-term revival in global trade volume, but should be particularly positive to Asian economies benefiting from the relocation of exporters from China (Vietnam, Taiwan, India, South Korea). The extension of Obamacare with the addition of a public option and expanded Medicare will be negative for pharmaceutical and US insurance companies. Tobacco and fast-food companies too will suffer. Strengthening alliances and creating a new "Summit of Democracies" will prove a boon to the EU, and to Asian democracies like Japan, India and South Korea. After the initial sell-off and rebalancing (away from Big Oil, pharmaceuticals, insurance, tobacco and fast-food), the liquidity-driven equities rally will resume. </li>
</ul>

The key impact of a Biden presidency will be an initial sell-off in US equities, given that Biden has pledged to raise the corporate tax to 28% (from 21%) and tighten regulation. It will also mean lower oil prices (good for India, Thailand, Korea, Japan), and a medium-term strengthening of global trade with a return to multilateralism, albeit amid a continued shift of global supply chains away from China. Big Oil, Big Pharma, and US insurance will be the losers in a Biden presidency, and global democracies (EU, Japan, India, South Korea) will benefit from his foreign policy. After an initial 5% sell-off in November 2020, and sectoral rebalancing, we expect the liquidity-driven equities rally to resume. 
With just over 3 months to go for the 3rd November presidential election, former Vice President Joe Biden leads President Trump in key national polls by 8-12 percentage points; the two latest nationwide polls (CBS News/YouGov, and Harvard-Harris) both give Biden a massive 10 percentage point lead. Biden also leads in key battleground states like Michigan (+12 CNN, +6 YouGov), Pennsylvania (+11), Florida (+5), North Carolina (+6) and Arizona (+5) -- all of which Trump won in 2016. Biden's coat-tails are bolstering Democrats across the country, with US Senate races in North Carolina and Arizona (two reliably Republican states over the past 4 decades) leaning strongly Democratic.   
The bigger the Biden win, the likelier it is that his coat-tails will flip the Senate to a Democratic majority (there are 23 Republican seats and 12 Democratic ones that are being contested this year; the Democrats need a net gain of 3 seats to have a simple majority in the Senate, 13 seats to have an unlikely filibuster-free majority needed for non-money bills). We expect the polls to tighten after the 3 presidential debates, and in the wake of more well-directed campaign advertisements against Biden (on Hunter/Burisma, the economy, etc.). However, the likelihood is that Biden will win the presidency, and the Democrats will retain the House.  
 With Biden likely to raise the corporate tax rate to 28% (from 21% currently) and tighten environmental regulation, equities will sell-off 5% in November 2020. The likely revival of the Iran nuclear deal, tighter regulation of fossil fuels (but no ban on fracking) will be negative for crude-oil prices (and hence for Exxon Mobil (XOM US) , Chevron Corp (CVX US) BP PLC (BP US) and Royal Dutch Shell (RDSA LN) ) -- and good news for Asian oil importers like India, Thailand, South Korea and Japan. The return to a more multilateral approach to trade negotiations will help a medium-term revival in global trade volume, but should be particularly positive to Asian economies benefiting from the relocation of exporters from China (Vietnam, Taiwan, India, South Korea). The extension of Obamacare with the addition of a public option and expanded Medicare will be negative for pharmaceutical and US insurance companies. Tobacco and fast-food companies too will suffer. Strengthening alliances and creating a new "Summit of Democracies" will prove a boon to the EU, and to Asian democracies like Japan, India and South Korea. After the initial sell-off and rebalancing (away from Big Oil, pharmaceuticals, insurance, tobacco and fast-food), the liquidity-driven equities rally will resume. 


What a Biden Presidency Will Mean for Markets, the Economy and Asia

United Kingdom

BP P.L.C is an energy company. The Company explores and produces oil and natural gas, refines, markets, and supplies petroleum products, as well as generates solar energy, and manufactures and markets chemicals such as terephthalic acid, acetic acid, acrylonitrile, ethylene, and polyethylene. BP serves customers worldwide.

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What a Biden Presidency Will Mean for Markets, the Economy and Asia

The key impact of a Biden presidency will be an initial sell-off in US equities, given that Biden has pledged to raise the corporate tax to 28%...

Prasenjit K. Basu

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