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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>At the January review, there are 2 changes to the IDX30 Index, 5 changes to the LQ45 Index, and 9 changes to the IDX30 Index.</li>
<li>Largest buying impact will be on <a href="https://www.smartkarma.com/entities/sumber-alfaria-trijaya-tbk-pt" target="_blank" data-smartkarma-citation="entities:15659:1" rel="noopener">Sumber Alfaria Trijaya Tbk Pt</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/waskita-karya-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:15739:1" rel="noopener">Waskita Karya (Persero) (WSKT IJ)</a>, <a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> and <a href="https://www.smartkarma.com/entities/xl-axiata-tbk-pt" target="_blank" data-smartkarma-citation="entities:15028:1" rel="noopener">XL Axiata (EXCL IJ)</a>. </li>
<li>Largest selling impact will be on <a href="https://www.smartkarma.com/entities/ace-hardware-indonesia" target="_blank" data-smartkarma-citation="entities:12808:1" rel="noopener">Ace Hardware Indonesia (ACES IJ)</a>, <a href="https://www.smartkarma.com/entities/jasa-marga-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:12747:1" rel="noopener">Jasa Marga (JSMR IJ)</a>, <a href="https://www.smartkarma.com/entities/pakuwon-jati-tbk-pt" target="_blank" data-smartkarma-citation="entities:8550:1" rel="noopener">Pakuwon Jati (PWON IJ)</a> , <a href="https://www.smartkarma.com/entities/bumi-serpong-damai-pt" target="_blank" data-smartkarma-citation="entities:15498:1" rel="noopener">Bumi Serpong Damai (BSDE IJ)</a> and <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>.</li>
</ul>


At the January review, there are 2 changes to the IDX30 Index, 5 changes to the LQ45 Index, and 9 changes to the IDX30 Index.
Largest buying impact will be on Sumber Alfaria Trijaya Tbk Pt, Emtek (EMTK IJ), Waskita Karya (Persero) (WSKT IJ), BFI Finance Indonesia (BFIN IJ) and XL Axiata (EXCL IJ). 
Largest selling impact will be on Ace Hardware Indonesia (ACES IJ), Jasa Marga (JSMR IJ), Pakuwon Jati (PWON IJ) , Bumi Serpong Damai (BSDE IJ) and HM Sampoerna (HMSP IJ).


IDX30/LQ45 Index Rebalance: BIG Impact Changes in Limited Time

<ul>
<li>The review period for the LQ45 Index ended on 31 December. The changes should be announced in the last week of January, becoming effective after the close on 31 January.</li>
<li>We see <a href="https://www.smartkarma.com/entities/waskita-karya-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:15739:1" rel="noopener">Waskita Karya (Persero) (WSKT IJ)</a>, <a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> and <a href="https://www.smartkarma.com/entities/harum-energy-tbk-pt" target="_blank" data-smartkarma-citation="entities:1604:1" rel="noopener">Harum Energy (HRUM IJ)</a> as higher probability inclusions in the LQ45 Index.</li>
<li>Given the focus is on liquidity, we see <a href="https://www.smartkarma.com/entities/jasa-marga-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:12747:1" rel="noopener">Jasa Marga (Persero) (JSMR IJ)</a>, <a href="https://www.smartkarma.com/entities/bumi-serpong-damai-pt" target="_blank" data-smartkarma-citation="entities:15498:1" rel="noopener">Bumi Serpong Damai (BSDE IJ)</a> and <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 higher probability deletion candidates.</li>
</ul>


The review period for the LQ45 Index ended on 31 December. The changes should be announced in the last week of January, becoming effective after the close on 31 January.
We see Waskita Karya (Persero) (WSKT IJ), BFI Finance Indonesia (BFIN IJ) and Harum Energy (HRUM IJ) as higher probability inclusions in the LQ45 Index.
Given the focus is on liquidity, we see Jasa Marga (Persero) (JSMR IJ), Bumi Serpong Damai (BSDE IJ) and AKR Corporindo (AKRA IJ) as higher probability deletion candidates.


LQ45 Index Rebalance Preview (Feb 2022): Potential Changes Later This Month

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

<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> has historically tended to lag its peers within the top four banks in Indonesia, both in terms of returns and risk management plus their digital initiatives have not yet caught the attention of investors. With a new senior management team in place from <a href="https://www.smartkarma.com/entities/bank-mandiri-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:441:1" rel="noopener">Bank Mandiri (BMRI IJ)</a> in place, we think this is about to change. 
<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>is making good progress on its COVID-19 loan restructuring with a reduction in loans under restructuring of IDR18tn in 1Q20201 versus 4Q2020, with further progress in April.
Credit costs fell significantly in 1Q2021, as did provisions versus 4Q2021. Overall NPLs also improved slightly in 1Q2021 falling to 4.1% of total loans. 
One key highlight in 1Q2021 was the decline in <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>'s cost of funds, which hit the lowest level ever at 1.7% in 1Q2021.
This has helped overall net interest margins (NIMs) hold up in 1Q2021, which are now above the bank's FY2021 guidance range.
The key driver for CASA has been the increased number of mobile banking users which have increased significantly.
Loan growth in 1Q2021 was slow at only +2.2% but this was against a slightly negative picture for the overall banking industry, with small business and consumer loans starting to rebound at <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>. 
A key focus for <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> is on the digitalization of both its retail and wholesale banking businesses, which we see as a significant growth driver.
<div class="content-highlight">
The bank now trades on 0.9x FY21E PBV, 11.6x FY21E PER, and 7.2x FY22E PER, with forecast EPS growth of +186% and +60% for FY21E and FY22E respectively. We continue to expect positive momentum over the coming quarters for the <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> both as the economy recovers and its new strategies continue to gain traction.
</div>

Bank Negara Indonesia Persero (BBNI IJ) has historically tended to lag its peers within the top four banks in Indonesia, both in terms of returns and risk management plus their digital initiatives have not yet caught the attention of investors. With a new senior management team in place from Bank Mandiri (BMRI IJ) in place, we think this is about to change. 
Bank Negara Indonesia Persero (BBNI IJ)is making good progress on its COVID-19 loan restructuring with a reduction in loans under restructuring of IDR18tn in 1Q20201 versus 4Q2020, with further progress in April.
Credit costs fell significantly in 1Q2021, as did provisions versus 4Q2021. Overall NPLs also improved slightly in 1Q2021 falling to 4.1% of total loans. 
One key highlight in 1Q2021 was the decline in Bank Negara Indonesia (BBNI IJ)'s cost of funds, which hit the lowest level ever at 1.7% in 1Q2021.
This has helped overall net interest margins (NIMs) hold up in 1Q2021, which are now above the bank's FY2021 guidance range.
The key driver for CASA has been the increased number of mobile banking users which have increased significantly.
Loan growth in 1Q2021 was slow at only +2.2% but this was against a slightly negative picture for the overall banking industry, with small business and consumer loans starting to rebound at Bank Negara Indonesia Persero (BBNI IJ). 
A key focus for Bank Negara Indonesia Persero (BBNI IJ) is on the digitalization of both its retail and wholesale banking businesses, which we see as a significant growth driver.

The bank now trades on 0.9x FY21E PBV, 11.6x FY21E PER, and 7.2x FY22E PER, with forecast EPS growth of +186% and +60% for FY21E and FY22E respectively. We continue to expect positive momentum over the coming quarters for the Bank Negara Indonesia Persero (BBNI IJ) both as the economy recovers and its new strategies continue to gain traction.


Bank Negara Indonesia (BBNI IJ) - The Happening

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

Currently, <a href="https://www.smartkarma.com/entities/jasa-marga-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:12747:1" rel="noopener">Jasa Marga (Persero) (JSMR IJ)</a> debt to equity is at 2.5x, a five-year high and its earnings multiple is also at the 5 years high at 35x. Some of the bullishness comes from the creation of the INA, the first sovereign wealth fund of Indonesia that will create another funding avenue for Jasa Marga. The commencement of vaccination for public servants and elderlies has also sparked positivity although the result (more traffic) is yet to be seen. At the current level, Jasa Marga's profitability is 28% lower than the peers despite almost having a 100% higher D/E ratio. It is also trading at 64% PER premium and 10% PBR premium. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/192/999/original/image_59574917191615277295474.png?1615277295" class="editor-image img-responsive" data-smartkarma-image-id="192999"></figure><div class="content-remarks">source: Capital IQ</div>At the current level, investors should wait before adding more Jasa Marga into the portfolio as it is trading at 5 years high in PER and also its D/E ratio as well.

Currently, Jasa Marga (Persero) (JSMR IJ) debt to equity is at 2.5x, a five-year high and its earnings multiple is also at the 5 years high at 35x. Some of the bullishness comes from the creation of the INA, the first sovereign wealth fund of Indonesia that will create another funding avenue for Jasa Marga. The commencement of vaccination for public servants and elderlies has also sparked positivity although the result (more traffic) is yet to be seen. At the current level, Jasa Marga's profitability is 28% lower than the peers despite almost having a 100% higher D/E ratio. It is also trading at 64% PER premium and 10% PBR premium. source: Capital IQAt the current level, investors should wait before adding more Jasa Marga into the portfolio as it is trading at 5 years high in PER and also its D/E ratio as well. 

Jasa Marga (JSMR): High Debt and Fully Valued

The fee increase, traffic recovery, and potential (still) low contribution from the construction business due to the pandemic are the three key elements that will drive the share price even higher for <a href="https://www.smartkarma.com/entities/jasa-marga-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:12747:1" rel="noopener">Jasa Marga (Persero) (JSMR IJ)</a> . Traffic recovery is an important piece of the puzzle that will bring PER lower and makes Jasa Marga optically not that pricey compared to the peers. With an expected low CAPEX in 2021, the company's blended margin will be as good as 2020 and not revert back to the level from previous years. Another future catalyst, although the timing is yet unclear, is the spin-off of the construction division then Jasa Marga will be a high-margin toll road operator that could potentially pay some higher dividend too.

The fee increase, traffic recovery, and potential (still) low contribution from the construction business due to the pandemic are the three key elements that will drive the share price even higher for Jasa Marga (Persero) (JSMR IJ) . Traffic recovery is an important piece of the puzzle that will bring PER lower and makes Jasa Marga optically not that pricey compared to the peers. With an expected low CAPEX in 2021, the company's blended margin will be as good as 2020 and not revert back to the level from previous years. Another future catalyst, although the timing is yet unclear, is the spin-off of the construction division then Jasa Marga will be a high-margin toll road operator that could potentially pay some higher dividend too. 

Jasa Marga (JSMR):Recovery Play and Low Capex

Indonesia

Jasa Marga (Persero) Tbk is an Indonesian company primarily engaged in developing, constructing, operating, managing, and maintaining toll roads. The company also provides road construction and maintenance services, manages rest areas, and develops real estate properties. Jasa Marga was founded in 1978 and is headquartered in Jakarta, Indonesia.

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Jasa Marga (JSMR IJ)

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Brian Freitas

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Bank Negara Indonesia (BBNI IJ) - The Happening

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Angus Mackintosh

Jasa Marga (JSMR): High Debt and Fully Valued

At the current level, investors should wait before adding more Jasa Marga into the portfolio as it is trading at 5 years high in PER and also its D...

Henry Soediarko

Jasa Marga (JSMR):Recovery Play and Low Capex

The price increase, traffic recovery, and potential low contribution from the construction business are the three key elements that will drive the...

Henry Soediarko

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