Indonesian Equities | Buy-Side Investment Research

Defriansyah Has

Equity Bottom-Up

<ul>
<li>
$BBRI is still growing, with loans up 12.23% YoY in 5M26. But the economics are deteriorating: NIM fell to 5.87%, while May-26 credit costs moved beyond the historical range.</li>
<li>A high payout ratio leaves only 7.98% of earnings retained, implying just 1.39% internal growth and raising the question of how sustained book-value growth can be financed.</li>
<li>Our Residual Income Model estimates intrinsic value at Rp2,952–Rp3,710, with the valuation less sensitive to near-term ROE recovery than the operating outlook suggests.</li>
</ul>



$BBRI is still growing, with loans up 12.23% YoY in 5M26. But the economics are deteriorating: NIM fell to 5.87%, while May-26 credit costs moved beyond the historical range.
A high payout ratio leaves only 7.98% of earnings retained, implying just 1.39% internal growth and raising the question of how sustained book-value growth can be financed.
Our Residual Income Model estimates intrinsic value at Rp2,952–Rp3,710, with the valuation less sensitive to near-term ROE recovery than the operating outlook suggests.


BBRI:IJ— The Growth Cannot Be Financed Twice

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>Following a market consultation, Indonesia could see its weight slashed in a global index and that will lead to passive selling in May.</li>
<li>Depending on the approach taken to computing free float, outflows could be in the range of US$925m and US$2.2bn.</li>
<li>The change in free float methodology could also lead to a few stocks being deleted from the index due to low free float market cap.</li>
</ul>


Following a market consultation, Indonesia could see its weight slashed in a global index and that will lead to passive selling in May.
Depending on the approach taken to computing free float, outflows could be in the range of US$925m and US$2.2bn.
The change in free float methodology could also lead to a few stocks being deleted from the index due to low free float market cap.


Global Index: Indonesia Likely to See Huge Outflows in May

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

<ul>
<li>Average weights have fallen to an all-time low of 0.93%, with fund participation at a 15-year low of 80.45% — yet the majority of active EM managers remain invested.</li>
<li>Selling has been concentrated in domestic banks, with Bank Central Asia seeing the largest outright closures, while ASEAN allocations as a whole have dropped to their lowest level on record.</li>
<li>With MSCI’s verdict on Indonesia’s EM status still pending, the country sits firmly in negative momentum territory, but for many funds, much of the pain may already be behind them.</li>
</ul>


Average weights have fallen to an all-time low of 0.93%, with fund participation at a 15-year low of 80.45% — yet the majority of active EM managers remain invested.
Selling has been concentrated in domestic banks, with Bank Central Asia seeing the largest outright closures, while ASEAN allocations as a whole have dropped to their lowest level on record.
With MSCI’s verdict on Indonesia’s EM status still pending, the country sits firmly in negative momentum territory, but for many funds, much of the pain may already be behind them.


Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/msci-inc" target="_blank" data-smartkarma-citation="entities:17865:1" rel="noopener">MSCI Inc (MSCI US)</a> downgrade momentum on Indonesia has hit a pause, and it is unlikely to happen. </li>
<li>In the meantime, the earnings growth rate for mid- and large-cap stocks remains intact; hence, that makes some of the Indonesian stocks even cheaper from a PEG perspective. </li>
<li>
<a href="https://www.smartkarma.com/entities/pt-bank-rakyat-indonesia-persero-tbk-class-b" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia (BBRI IJ)</a> pays 11% yield, <a href="https://www.smartkarma.com/entities/pt-telkom-indonesia-persero-tbk-class-b" target="_blank" data-smartkarma-citation="entities:1051:1" rel="noopener">Telkom Indonesia (TLKM IJ)</a>has an asset spin off awaiting, while <a href="https://www.smartkarma.com/entities/pt-astra-international-tbk" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a> is trading at 6x PER with 8% dividend.</li>
</ul>



MSCI Inc (MSCI US) downgrade momentum on Indonesia has hit a pause, and it is unlikely to happen. 
In the meantime, the earnings growth rate for mid- and large-cap stocks remains intact; hence, that makes some of the Indonesian stocks even cheaper from a PEG perspective. 

Bank Rakyat Indonesia (BBRI IJ) pays 11% yield, Telkom Indonesia (TLKM IJ)has an asset spin off awaiting, while Astra International (ASII IJ) is trading at 6x PER with 8% dividend.


<ul>
<li>The ASEAN overweight rests on Indonesia and non-benchmark Singapore/Vietnam, offset by Malaysia’s structural underweight. Recent flows show pressure on Indonesia and Malaysia, with Singapore and Thailand benefiting.</li>
<li>Indonesian Financials dominate ASEAN exposure but are losing momentum; fresh inflows support Singapore Discretionary and Technology, plus Thailand Communication Services and Staples.</li>
<li>Stock trends highlight fading Indonesian banks, while new highs come from ICTSI, Grab, GoTo, and Singtel, signalling a potential shift in leadership.</li>
</ul>


The ASEAN overweight rests on Indonesia and non-benchmark Singapore/Vietnam, offset by Malaysia’s structural underweight. Recent flows show pressure on Indonesia and Malaysia, with Singapore and Thailand benefiting.
Indonesian Financials dominate ASEAN exposure but are losing momentum; fresh inflows support Singapore Discretionary and Technology, plus Thailand Communication Services and Staples.
Stock trends highlight fading Indonesian banks, while new highs come from ICTSI, Grab, GoTo, and Singtel, signalling a potential shift in leadership.


ASEAN Rotation: Indonesia Weakens, Singapore Gains, Thailand Stabilises

Indonesia

PT Bank Rakyat Indonesia (Persero) Tbk is one of Indonesia's largest banks, specializing in providing banking products and services, including savings accounts, loans, and other financial solutions to micro, small, and medium enterprises (MSMEs), as well as retail and corporate clients. The company also offers investment, insurance, and digital banking services. Headquartered in Jakarta, Indonesia, the bank was founded on December 16, 1895.

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Bank Rakyat Indonesia (BBRI IJ)

BBRI:IJ— The Growth Cannot Be Financed Twice

BBRI's loan growth remains strong, but weaker NIM, elevated credit costs and shifting loan mix challenge the economics of that growth. Our RIM...

Defriansyah Has

Global Index: Indonesia Likely to See Huge Outflows in May

This is going be a huge theme today for Indonesia. The price movements of a lot of stocks have raised issues in the past with global index...

Brian Freitas

Indonesia: Record Lows But Not Abandoned

Average weights have fallen to an all-time low of 0.93%, with fund participation at a 15-year low of 80.45% — yet the majority of active EM...

Steven Holden

Indonesia: Time to Scoop Up Bargain?

MSCI Inc downgrades Indonesia has paused while earnings growth for mid- and large-cap stocks intact, making Indonesian stocks cheaper.

Henry Soediarko

ASEAN Rotation: Indonesia Weakens, Singapore Gains, Thailand Stabilises

ASEAN positioning shifts as Indonesia loses ground and Malaysia stays weak. Singapore and Thailand attract inflows, while new leaders like ICTSI...

Steven Holden

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

BBRI:IJ— The Growth Cannot Be Financed Twice

BBRI's loan growth remains strong, but weaker NIM, elevated credit costs and shifting loan mix challenge the economics of that growth. Our RIM...

Defriansyah Has

Global Index: Indonesia Likely to See Huge Outflows in May

This is going be a huge theme today for Indonesia. The price movements of a lot of stocks have raised issues in the past with global index...

Brian Freitas

Indonesia: Record Lows But Not Abandoned

Average weights have fallen to an all-time low of 0.93%, with fund participation at a 15-year low of 80.45% — yet the majority of active EM...

Steven Holden

Indonesia: Time to Scoop Up Bargain?

​MSCI Inc downgrades Indonesia has paused while earnings growth for mid- and large-cap stocks intact, making Indonesian stocks cheaper.

Henry Soediarko

ASEAN Rotation: Indonesia Weakens, Singapore Gains, Thailand Stabilises

ASEAN positioning shifts as Indonesia loses ground and Malaysia stays weak. Singapore and Thailand attract inflows, while new leaders like ICTSI...

Steven Holden

MSCI Inc downgrades Indonesia has paused while earnings growth for mid- and large-cap stocks intact, making Indonesian stocks cheaper.