Daily Brief Indonesia: Adaro Energy, Bank Rakyat Indonesia, Medco Energi and more

• Float and capping changes will require passive trackers to sell Bank Central Asia (BBCA) and Adaro Energy (ADRO) while buying Bank Rakyat Indonesia (BBRI) and GoTo Gojek Tokopedia (GOTO). 
• There will be passive trading to other stocks too, though the impact and flow is not material on most of the stocks.
• Passive trackers will trade at the close on 31 October, so there are only 3 days to implementation of the changes.

• Bank Rakyat Indonesia’s numbers made for positive reading with loan growth coming through in productive areas, especially for Kupedes commercial micro-loans but also from its PNM and Pegadaian subsidiaries.
• The bank maintained its funding costs at highly competitive levels despite rising rates and time deposit growth with NIMs improving due to a better loan mix in micro.
• Bank Rakyat Indonesia (BBRI IJ) remains the most direct way to get exposure to greater financial inclusion and the underbanked in Indonesia. Valuations remain attractive with rising ROA and ROE. 

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Medco Energi