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/pt-aneka-gas-industri" target="_blank" data-smartkarma-citation="entities:23564:1" rel="noopener">Aneka Gas (AGII IJ)</a> is Indonesia's leading industrial gas company, which is often under-appreciated as the immediate assumption is that is purely an industrial supplier. In fact, that it is plugged into a broad swath of the Indonesian economy, which makes it a proxy for recovery but relatively defensive at the same time. 
It supplies industrial users but also supplies medical gases, consumer companies, SMEs (retail), and infrastructure through welding and its input into the steel-making process.
The latest potential use-case and growth area comes with the rapid build-out of smelters in Indonesia to process metals and minerals locally. 
<a href="https://www.smartkarma.com/entities/pt-aneka-gas-industri" target="_blank" rel="noopener">Aneka Gas (AGII IJ)</a> has seen an increase in demand for gas products for medical needs of around +50% after the last Eid holiday
We continue to take a positive view of <a href="https://www.smartkarma.com/entities/pt-aneka-gas-industri" target="_blank" data-smartkarma-citation="entities:23564:1" rel="noopener">Aneka Gas (AGII IJ)</a>not only for its exposure to the provision of medical gas but also for overall exposure to the economic recovery, through its exposure to industry consumer goods, SMEs, and infrastructure. The company trades on 10.3x FY21E EV/EBITDA and 9.8x FY22E EV/EBITDA, with the potential for earnings upgrades.

Aneka Gas (AGII IJ) is Indonesia's leading industrial gas company, which is often under-appreciated as the immediate assumption is that is purely an industrial supplier. In fact, that it is plugged into a broad swath of the Indonesian economy, which makes it a proxy for recovery but relatively defensive at the same time. 
It supplies industrial users but also supplies medical gases, consumer companies, SMEs (retail), and infrastructure through welding and its input into the steel-making process.
The latest potential use-case and growth area comes with the rapid build-out of smelters in Indonesia to process metals and minerals locally. 
Aneka Gas (AGII IJ) has seen an increase in demand for gas products for medical needs of around +50% after the last Eid holiday
We continue to take a positive view of Aneka Gas (AGII IJ)not only for its exposure to the provision of medical gas but also for overall exposure to the economic recovery, through its exposure to industry consumer goods, SMEs, and infrastructure. The company trades on 10.3x FY21E EV/EBITDA and 9.8x FY22E EV/EBITDA, with the potential for earnings upgrades.

Aneka Gas (AGII IJ) - Living and Breathing the Indonesian Economy

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

The LQ45 Index is a market cap weighted index of the 45 most liquid stocks listed on the Indonesia Stock Exchange. The LQ45 Index covers at least 70% of the stock market capitalization and transaction values in the Indonesia Stock Market.The next rebalance of the LQ45 Index will be effective after the close of trading on 29 January and will be announced latest by 26 January, though it is likely that it could be announced as early as 22 January post market close.Stocks that could be included in the index are <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/kimia-farma-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:8524:1" rel="noopener">Kimia Farma Persero (KAEF IJ)</a>, <a href="https://www.smartkarma.com/entities/timah-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:11174:1" rel="noopener">Timah Persero (TINS IJ)</a> and <a href="https://www.smartkarma.com/entities/pp-london-sumatra-indones-pt" target="_blank" data-smartkarma-citation="entities:9039:1" rel="noopener">Pp London Sumatra Indones (LSIP IJ)</a>, while stocks that could be deleted from the index are <a href="https://www.smartkarma.com/entities/sri-rejeki-isman-tbk-pt" target="_blank" data-smartkarma-citation="entities:20178:1" rel="noopener">Sri Rejeki Isman (SRIL IJ)</a>, <a href="https://www.smartkarma.com/entities/summarecon-agung-tbk-pt" target="_blank" data-smartkarma-citation="entities:5693:1" rel="noopener">Summarecon Agung (SMRA IJ)</a>, <a href="https://www.smartkarma.com/entities/wijaya-karya-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:1877:1" rel="noopener">Wijaya Karya Persero (WIKA IJ)</a> and <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>.Given the subjective nature of stock inclusion and exclusion, plus the short time frame between announcement of the changes and the implementation, the adds outperform the deletes between announcement and implementation.Though passive assets tracking the index are limited, the LQ45 is a very popular benchmark for mutual funds and pension funds and active managers will also be trading the stocks to realign their portfolios to the new index names.

The LQ45 Index is a market cap weighted index of the 45 most liquid stocks listed on the Indonesia Stock Exchange. The LQ45 Index covers at least 70% of the stock market capitalization and transaction values in the Indonesia Stock Market.The next rebalance of the LQ45 Index will be effective after the close of trading on 29 January and will be announced latest by 26 January, though it is likely that it could be announced as early as 22 January post market close.Stocks that could be included in the index are Bank Brisyariah (BRIS IJ), Kimia Farma Persero (KAEF IJ), Timah Persero (TINS IJ) and Pp London Sumatra Indones (LSIP IJ), while stocks that could be deleted from the index are Sri Rejeki Isman (SRIL IJ), Summarecon Agung (SMRA IJ), Wijaya Karya Persero (WIKA IJ) and Jasa Marga (Persero) (JSMR IJ).Given the subjective nature of stock inclusion and exclusion, plus the short time frame between announcement of the changes and the implementation, the adds outperform the deletes between announcement and implementation.Though passive assets tracking the index are limited, the LQ45 is a very popular benchmark for mutual funds and pension funds and active managers will also be trading the stocks to realign their portfolios to the new index names.

LQ45 Index Rebalance Preview: Potential Candidates for Change

Indonesia Political Risk Analyst

Kevin O’Rourke

Reformasi

29 November marked a turning point in the half-century history of the world's largest gold mine (and 2nd largest copper mine), PT Freeport Indonesia, owned by <a href="https://www.smartkarma.com/entities/12491" target="_blank" data-smartkarma-citation="entities:12491:1">Freeport Mcmoran (FCX US)</a>.  News emerged that President Widodo prevailed upon two officials who had been hampering his nationalization plan, whereby state-owned PT Inalum purchases 51 percent of Freeport for US$3.85 billion.  Inalum secured financing through bonds in early November, and today the minister of environment and forestry conceded to a relaxation of restrictions on tailings disposals -- a key factor that had threatened to block the deal.  Widodo also secured the crucial support of Papua Governor Lukas Enembe.  There would now appear to be nothing left standing in the way of the transaction finally coming to fruition during December. Economically, this will only serve to exacerbate the government's exposure to commodity cycles.  But politically Widodo will be able to use the deal to burnish his image as a nationalist in the presidential campaign.  For FCX, the nationalization brings myriad new risks, but FCX executives approve the pricing and the terms provide for FCX to retain operational control.  The share-sale should enable the mine to embark on its long-delayed underground expansion -- although whether Inalum can shoulder its share of the US$20 billion capex plan may now become the next episode in the Freeport saga.

29 November marked a turning point in the half-century history of the world's largest gold mine (and 2nd largest copper mine), PT Freeport Indonesia, owned by Freeport Mcmoran (FCX US).  News emerged that President Widodo prevailed upon two officials who had been hampering his nationalization plan, whereby state-owned PT Inalum purchases 51 percent of Freeport for US$3.85 billion.  Inalum secured financing through bonds in early November, and today the minister of environment and forestry conceded to a relaxation of restrictions on tailings disposals -- a key factor that had threatened to block the deal.  Widodo also secured the crucial support of Papua Governor Lukas Enembe.  There would now appear to be nothing left standing in the way of the transaction finally coming to fruition during December. Economically, this will only serve to exacerbate the government's exposure to commodity cycles.  But politically Widodo will be able to use the deal to burnish his image as a nationalist in the presidential campaign.  For FCX, the nationalization brings myriad new risks, but FCX executives approve the pricing and the terms provide for FCX to retain operational control.  The share-sale should enable the mine to embark on its long-delayed underground expansion -- although whether Inalum can shoulder its share of the US$20 billion capex plan may now become the next episode in the Freeport saga. 

Environment Minister Removes Last Hurdle to Nationalization of Freeport (FCX US) Mine

Indonesia

PT Timah Tbk is an Indonesian state-owned enterprise primarily engaged in integrated tin mining and smelting operations, including exploration, processing, and marketing of tin metal and its derivatives. The company also produces non-tin products such as coal, nickel, and quartz sand, and is involved in industrial, trading, transportation, and various services. Headquartered in Pangkalpinang, Bangka, Indonesia, the company was founded on August 2, 1976.

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Timah (TINS IJ)

Aneka Gas (AGII IJ) - Living and Breathing the Indonesian Economy

Aneka Gas provides exposure to medical gases but is also broadly exposed to Indonesia's broader economic recovery, through its exposure to industry...

Angus Mackintosh

LQ45 Index Rebalance Preview: Potential Candidates for Change

The LQ45 rebalance will be effective after the close of trading on 29 January and the announcement will be made in the next few days. There could...

Brian Freitas

Environment Minister Removes Last Hurdle to Nationalization of Freeport (FCX US) Mine

29 November marked a turning point in the half-century history of the world's largest gold mine (and 2nd largest copper mine), PT Freeport...

Kevin O’Rourke

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