Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

The Indonesia Stock Exchange (IDX) has announced a change in the <a href="https://www.smartkarma.com/entities/jakarta-stock-exchange-composite-index" target="_blank" data-smartkarma-citation="entities:22914:1" rel="noopener">Jakarta Stock Exchange Composite Index (JCI INDEX)</a> calculation methodology to make it a free float market cap weighted index from a full market cap weighted index. Additionally, there will be a 9% capping on the weight of a single stock in the index.The change will take place in a phased manner in 3 stages: at the beginning of October 2020, January 2021 and April 2021.The biggest beneficiaries of the change are expected to be <a href="https://www.smartkarma.com/entities/telekomunikasi-indonesia" target="_blank" data-smartkarma-citation="entities:1051:1" rel="noopener">Telekomunikasi Indonesia (TLKM IJ)</a>, <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>, <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>, <a href="https://www.smartkarma.com/entities/bank-mandiri-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:441:1" rel="noopener">Bank Mandiri Persero (BMRI IJ)</a>, <a href="https://www.smartkarma.com/entities/merdeka-copper-gold-tbk-pt" target="_blank" data-smartkarma-citation="entities:28447:1" rel="noopener">Merdeka Copper Gold Tbk PT (MDKA IJ)</a>, <a href="https://www.smartkarma.com/entities/charoen-pokphand-indonesi-pt" target="_blank" data-smartkarma-citation="entities:10889:1" rel="noopener">Charoen Pokphand Indonesi (CPIN IJ)</a>, <a href="https://www.smartkarma.com/entities/semen-indonesia-persero-tbk" target="_blank" data-smartkarma-citation="entities:11161:1" rel="noopener">Semen Indonesia (Gresik) (SMGR IJ)</a>, <a href="https://www.smartkarma.com/entities/sarana-menara-nusantara-pt" target="_blank" data-smartkarma-citation="entities:6848:1" rel="noopener">Sarana Menara Nusantara (TOWR IJ)</a>, <a href="https://www.smartkarma.com/entities/indofood-sukses-makmur-tbk-p" target="_blank" data-smartkarma-citation="entities:1053:1" rel="noopener">Indofood Sukses Makmur Tbk P (INDF IJ)</a> and <a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia Persero (BBNI IJ)</a>.The biggest falls in index weight are expected on <a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">Bank Central Asia (BBCA IJ)</a>, <a href="https://www.smartkarma.com/entities/hm-sampoerna-tbk-pt" target="_blank" data-smartkarma-citation="entities:617:1" rel="noopener">HM Sampoerna (HMSP IJ)</a>, <a href="https://www.smartkarma.com/entities/unilever-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:231:1" rel="noopener">Unilever Indonesia (UNVR IJ)</a>, <a href="https://www.smartkarma.com/entities/chandra-asri-petrochemical" target="_blank" data-smartkarma-citation="entities:2556:1" rel="noopener">Chandra Asri Petrochemical (TPIA IJ)</a>, <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>, <a href="https://www.smartkarma.com/entities/bank-brisyariah-tbk-pt" target="_blank" data-smartkarma-citation="entities:26981:1" rel="noopener">Bank Brisyariah (BRIS IJ)</a>, <a href="https://www.smartkarma.com/entities/elang-mahkota-teknologi-tbk" target="_blank" data-smartkarma-citation="entities:7752:1" rel="noopener">Emtek (EMTK IJ)</a>, <a href="https://www.smartkarma.com/entities/bayan-resources-group" target="_blank" data-smartkarma-citation="entities:8039:1" rel="noopener">Bayan Resources (BYAN IJ)</a> and <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago Tbk PT (ARTO IJ)</a>.Among the upweights, there could be over 2 days of ADV to trade on <a href="https://www.smartkarma.com/entities/charoen-pokphand-indonesi-pt" target="_blank" data-smartkarma-citation="entities:10889:1" rel="noopener">Charoen Pokphand Indonesi (CPIN IJ)</a> and <a href="https://www.smartkarma.com/entities/semen-indonesia-persero-tbk" target="_blank" data-smartkarma-citation="entities:11161:1" rel="noopener">Semen Indonesia (Gresik) (SMGR IJ)</a> while there could be over 1 day of ADV to trade on <a href="https://www.smartkarma.com/entities/telekomunikasi-indonesia" target="_blank" data-smartkarma-citation="entities:1051:1" rel="noopener">Telekomunikasi Indonesia (TLKM IJ)</a>, <a href="https://www.smartkarma.com/entities/indofood-sukses-makmur-tbk-p" target="_blank" data-smartkarma-citation="entities:1053:1" rel="noopener">Indofood Sukses Makmur Tbk P (INDF IJ)</a>, <a href="https://www.smartkarma.com/entities/sarana-menara-nusantara-pt" target="_blank" data-smartkarma-citation="entities:6848:1" rel="noopener">Sarana Menara Nusantara (TOWR IJ)</a> and <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>.<a href="https://www.smartkarma.com/entities/hm-sampoerna-tbk-pt" target="_blank" data-smartkarma-citation="entities:617:1" rel="noopener">HM Sampoerna (HMSP IJ)</a>, <a href="https://www.smartkarma.com/entities/chandra-asri-petrochemical" target="_blank" data-smartkarma-citation="entities:2556:1" rel="noopener">Chandra Asri Petrochemical (TPIA IJ)</a> and <a href="https://www.smartkarma.com/entities/unilever-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:231:1" rel="noopener">Unilever Indonesia (UNVR IJ)</a> would be the most impacted stocks with potential outflows.

The Indonesia Stock Exchange (IDX) has announced a change in the Jakarta Stock Exchange Composite Index (JCI INDEX) calculation methodology to make it a free float market cap weighted index from a full market cap weighted index. Additionally, there will be a 9% capping on the weight of a single stock in the index.The change will take place in a phased manner in 3 stages: at the beginning of October 2020, January 2021 and April 2021.The biggest beneficiaries of the change are expected to be Telekomunikasi Indonesia (TLKM IJ), Bank Rakyat Indonesia Persero (BBRI IJ), Astra International (ASII IJ), Bank Mandiri Persero (BMRI IJ), Merdeka Copper Gold Tbk PT (MDKA IJ), Charoen Pokphand Indonesi (CPIN IJ), Semen Indonesia (Gresik) (SMGR IJ), Sarana Menara Nusantara (TOWR IJ), Indofood Sukses Makmur Tbk P (INDF IJ) and Bank Negara Indonesia Persero (BBNI IJ).The biggest falls in index weight are expected on Bank Central Asia (BBCA IJ), HM Sampoerna (HMSP IJ), Unilever Indonesia (UNVR IJ), Chandra Asri Petrochemical (TPIA IJ), Bank Permata (BNLI IJ), Bank Brisyariah (BRIS IJ), Emtek (EMTK IJ), Bayan Resources (BYAN IJ) and Bank Jago Tbk PT (ARTO IJ).Among the upweights, there could be over 2 days of ADV to trade on Charoen Pokphand Indonesi (CPIN IJ) and Semen Indonesia (Gresik) (SMGR IJ) while there could be over 1 day of ADV to trade on Telekomunikasi Indonesia (TLKM IJ), Indofood Sukses Makmur Tbk P (INDF IJ), Sarana Menara Nusantara (TOWR IJ) and Astra International (ASII IJ).HM Sampoerna (HMSP IJ), Chandra Asri Petrochemical (TPIA IJ) and Unilever Indonesia (UNVR IJ) would be the most impacted stocks with potential outflows.

Jakarta Composite Index: Impact of Change to Capped Free Float Weighting

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/indofood-cbp-sukses-makmur-tbk" target="_blank" data-smartkarma-citation="entities:17651:1" rel="noopener">Indofood CBP Sukses (ICBP IJ)</a> has weathered the worst of higher raw material prices and is now seeing the benefits of lower input costs, benefiting margins.</li>
<li>The company is a core beneficiary of pre-election spending as its products are often given as gifts during campaigning. ICBP is also seeing strong performance in its export markets.</li>
<li>ICBP should increasingly be seen as an emerging market staples player, with globally recognised brands such as Indomie and Chitato. Valuations do not reflect this.</li>
</ul>



Indofood CBP Sukses (ICBP IJ) has weathered the worst of higher raw material prices and is now seeing the benefits of lower input costs, benefiting margins.
The company is a core beneficiary of pre-election spending as its products are often given as gifts during campaigning. ICBP is also seeing strong performance in its export markets.
ICBP should increasingly be seen as an emerging market staples player, with globally recognised brands such as Indomie and Chitato. Valuations do not reflect this.


Indofood CBP Sukses (ICBP IJ) - FMCG On Track at Home and Abroad

PT Surya Citra Media Tbk / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener">PT Surya Citra Media Tbk (SCMA IJ)</a> had an exciting 2022, with a ramp-up in new audience share-winning original content along with the boost from the Word Cup rights. </li>
<li>Both SCTV and IVM gained significant audience share in 2022, and Vidio led the charge on OTT driven by killer content, finishing the year with 5m paying subscribers. </li>
<li>Profitability was hit by a sharp rise in production costs and investment in Vidio but we expect significant improvement in 2023. Valuations are attractive with SCMA on 12x FY2023E PER. </li>
</ul>



PT Surya Citra Media Tbk (SCMA IJ) had an exciting 2022, with a ramp-up in new audience share-winning original content along with the boost from the Word Cup rights. 
Both SCTV and IVM gained significant audience share in 2022, and Vidio led the charge on OTT driven by killer content, finishing the year with 5m paying subscribers. 
Profitability was hit by a sharp rise in production costs and investment in Vidio but we expect significant improvement in 2023. Valuations are attractive with SCMA on 12x FY2023E PER. 


PT Surya Citra Media (SCMA IJ) - Primed for Reset in 2023

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.

Equity Capital Markets

Pertamina Geothermal Energy PT / Equity Capital Markets

<ul>
<li>Pertamina Geothermal Energy (PGE) is looking to raise around US$650m in its upcoming Indonesia IPO. PGE is an Indonesian state owned power producer which utilizes geothermal energy to produce electricity.</li>
<li>PGE currently manages 13 Geothermal Working Areas with a total capacity of 1,877 MW, of which 672 MW is owned by it, while 1,205 MW is via joint operations.</li>
<li>In this note, we talk about the company's financial performance and other issues, based on its recent filings. </li>
</ul>


Pertamina Geothermal Energy (PGE) is looking to raise around US$650m in its upcoming Indonesia IPO. PGE is an Indonesian state owned power producer which utilizes geothermal energy to produce electricity.
PGE currently manages 13 Geothermal Working Areas with a total capacity of 1,877 MW, of which 672 MW is owned by it, while 1,205 MW is via joint operations.
In this note, we talk about the company's financial performance and other issues, based on its recent filings. 


Pertamina Geothermal Energy IPO - Somewhat like an Energy Explorer. Somewhat like a Power Producer

Bank Negara Indonesia Persero / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia (BBNI IJ)</a> remains the laggard amongst the top four Indonesian banks but we see this as unjustified given improving returns and falling credit costs.</li>
<li>The bank continues to focus on top-tier corporate clients and large commercial clients plus growing subsidized KUR loans as well as expanding mortgages and payroll loans in the consumer segment.  </li>
<li>
<a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia</a> continues to improve returns with its ROE back to 15% in 1H2022 and it trades on 1.2x FY2022 PBV. The bank will benefit from rising interest rates.</li>
</ul>



Bank Negara Indonesia (BBNI IJ) remains the laggard amongst the top four Indonesian banks but we see this as unjustified given improving returns and falling credit costs.
The bank continues to focus on top-tier corporate clients and large commercial clients plus growing subsidized KUR loans as well as expanding mortgages and payroll loans in the consumer segment.  

Bank Negara Indonesia continues to improve returns with its ROE back to 15% in 1H2022 and it trades on 1.2x FY2022 PBV. The bank will benefit from rising interest rates.


Bank Negara Indonesia (BBNI IJ) - More Than Meets the Eye

Indonesia

PT Indofood Sukses Makmur Tbk and its subsidiaries manufacture instant noodles, wheat flour, baby food, food seasonings, coffee, cooking oil, and snacks.

Indofood Sukses Makmur Tbk P (INDF IJ)

Jakarta Composite Index: Impact of Change to Capped Free Float Weighting

The JCI will change from a full market cap weighted index to a capped free float mkt cap weighted index. Beneficiaries are TLKM, BBRI, ASII, BMRI &...

Brian Freitas

Indofood CBP Sukses (ICBP IJ) - FMCG On Track at Home and Abroad

Indofood CBP should increasingly be seen as an emerging market consumer staples player, with globally recognised brands such as Indomie and...

Angus Mackintosh

PT Surya Citra Media (SCMA IJ) - Primed for Reset in 2023

PT Surya Citra Media had an exciting 2022, with a ramp-up in new audience share-winning original content along with the boost from the Word Cup but...

Angus Mackintosh

Pertamina Geothermal Energy IPO - Somewhat like an Energy Explorer. Somewhat like a Power Producer

Pertamina Geothermal Energy (PGE) is looking to raise around US$650m in its upcoming Indonesia IPO. PGE is an state owned power producer which...

Sumeet Singh

Bank Negara Indonesia (BBNI IJ) - More Than Meets the Eye

Bank Negara Indonesia (BBNI IJ) remains the laggard amongst the top four Indonesian banks but we see this as unjustified given improving returns...

Angus Mackintosh