Research Analyst

Ilvin Cornelis

Thematic (Sector/Industry)

<p>I really like these eight banks – <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/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/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia Persero (BBNI IJ),</a><a href="https://www.smartkarma.com/entities/bank-tabungan-negara-persero" target="_blank" data-smartkarma-citation="entities:731:1" rel="noopener">Bank Tabungan Negara Persero (BBTN IJ), </a><a href="https://www.smartkarma.com/entities/bpd-jawa-barat-dan-banten-tb" target="_blank" data-smartkarma-citation="entities:134:1" rel="noopener">Bank BJB (BJBR IJ)</a><a href="https://www.smartkarma.com/entities/bank-tabungan-negara-persero" target="_blank" data-smartkarma-citation="entities:731:1" rel="noopener"> </a>, <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/bank-danamon-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:135:1" rel="noopener">Bank Danamon Indonesia (BDMN IJ)</a>, and <a href="https://www.smartkarma.com/entities/bank-pan-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:727:1" rel="noopener">Bank Pan Indonesia (PNBN IJ)</a>, mainly due to their reasonable valuations, coupled with their ability to attract more deposits from customers.</p>
<p>Many of these banks are still trading below, or at least in line, with their historical 3-year average PBRs. Given my expectation of profitability improvements over the next 3 years, their current valuations are still reasonably attractive.</p>

I really like these eight banks – Bank Rakyat Indonesia Persero (BBRI IJ), Bank Mandiri Persero (BMRI IJ), Bank Negara Indonesia Persero (BBNI IJ),Bank Tabungan Negara Persero (BBTN IJ), Bank BJB (BJBR IJ) , Bank Central Asia (BBCA IJ), Bank Danamon Indonesia (BDMN IJ), and Bank Pan Indonesia (PNBN IJ), mainly due to their reasonable valuations, coupled with their ability to attract more deposits from customers.
Many of these banks are still trading below, or at least in line, with their historical 3-year average PBRs. Given my expectation of profitability improvements over the next 3 years, their current valuations are still reasonably attractive.

Indonesia's Banking Sector: The Eight Bank Stocks to Watch For

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Sembcorp Marine, AusNet, Shinsei Bank, MMC Corp

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

Bank Negara Indonesia Persero / Equity Bottom-Up

<div class="content-highlight">
<p><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> revealed some interesting views on its strategy for expansion over the next few years at a webinar hosted by <a href="https://www.smartkarma.com/profiles/daniel-tabbush" target="_blank" data-smartkarma-citation="accounts:12" rel="noopener">Daniel Tabbush</a> on Smartkarma this week, driven to a large extent by the new senior management team at the bank.</p>
</div>
<section class="figure">
<figure class="editor-figure mceNonEditable"></figure>
</section>
<p>Loan growth continues to be driven by lower risk areas such as corporate loans to top tier customers with the addition of some notable new high-profile clients.</p>
<p>Its micro KUR loans, SME loans, payroll, and consumer loans, mainly mortgages, also continue to grow, with medium-sized loans declining.</p>
<section class="figure">
<figure class="editor-figure mceNonEditable"></figure>
</section>
<p>The cost of 3rd party funds continued to fall to an all-time low in 2Q2021 given the rapid decline in time deposit rates and increasing CASA.</p>
<p>Profitability also continued to improve in 2Q2021 with PPOP rising by 24.4%, whilst net profit increased by +12.8% YoY and +7% QoQ. <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 optimistic on the outlook for returns, targeting higher ROEs in 2022, mainly driven by higher ROA.</p>
<p><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> continued to push forward with its digital transformation and especially with mobile banking, where it now has the highest customer rating for its app versus its peers.</p>
<p><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> has also revealed that it is potentially open to opening a stand-alone digital bank through acquiring a smaller bank, which is a change from the previous strategy.</p>
<p><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> continues to be a universal bank with around 70% of its business coming from wholesale lending. Management continues to see a huge opportunity in cross-selling its cash management businesses and other services.</p>
<p><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 revised its guidance somewhat to reflect this latest round of Emergency PPKM measures with loan growth downgraded slightly but net interest margin forecasts increased.</p>
<p>Valuations look appealing, with the bank trading on 0.7x FY2021E PBV and a forward FY22E PER of 6.5x. <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>) is often seen as the bank playing catch up with its peers but maybe this time is different. </p>


Bank Negara Indonesia Persero (BBNI IJ) revealed some interesting views on its strategy for expansion over the next few years at a webinar hosted by Daniel Tabbush on Smartkarma this week, driven to a large extent by the new senior management team at the bank.




Loan growth continues to be driven by lower risk areas such as corporate loans to top tier customers with the addition of some notable new high-profile clients.
Its micro KUR loans, SME loans, payroll, and consumer loans, mainly mortgages, also continue to grow, with medium-sized loans declining.



The cost of 3rd party funds continued to fall to an all-time low in 2Q2021 given the rapid decline in time deposit rates and increasing CASA.
Profitability also continued to improve in 2Q2021 with PPOP rising by 24.4%, whilst net profit increased by +12.8% YoY and +7% QoQ. Bank Negara Indonesia Persero (BBNI IJ) is optimistic on the outlook for returns, targeting higher ROEs in 2022, mainly driven by higher ROA.
Bank Negara Indonesia Persero (BBNI IJ) continued to push forward with its digital transformation and especially with mobile banking, where it now has the highest customer rating for its app versus its peers.
Bank Negara Indonesia (BBNI IJ) has also revealed that it is potentially open to opening a stand-alone digital bank through acquiring a smaller bank, which is a change from the previous strategy.
Bank Negara Indonesia Persero (BBNI IJ) continues to be a universal bank with around 70% of its business coming from wholesale lending. Management continues to see a huge opportunity in cross-selling its cash management businesses and other services.
Bank Negara Indonesia Persero (BBNI IJ) has revised its guidance somewhat to reflect this latest round of Emergency PPKM measures with loan growth downgraded slightly but net interest margin forecasts increased.
Valuations look appealing, with the bank trading on 0.7x FY2021E PBV and a forward FY22E PER of 6.5x. Bank Negara Indonesia (BBNI IJ) is often seen as the bank playing catch up with its peers but maybe this time is different. 

Bank Negara Indonesia (BBNI IJ) - Revealing a New Digital Skin

Travis Lundy

<p>13 days ago I wrote <a href="https://www.smartkarma.com/insights/bank-rakyat-indonesia-bbri-s-mega-rights-issue-plenty-of-opportunity-short-term-and-long-term" target="_blank" data-smartkarma-citation="insights:57354" rel="noopener">Bank Rakyat Indonesia (BBRI)'s Mega Rights Issue - Plenty of Opportunity Short-Term and Long-Term</a> suggesting that the stock could fall as it entered its rights trading period. It has. At one point on 20 September the stock was down 7% from time of writing.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/230/848/original/Screenshot+2021-09-20+at+9.30.06+PM.png?1632145029" class="editor-image img-responsive" data-smartkarma-image-id="230848"></figure></section><p>The time for people to buy and exercise is done, except for professional investors who can turn around their corporate action in a day or less. </p><p>More discussion below.</p>

13 days ago I wrote Bank Rakyat Indonesia (BBRI)'s Mega Rights Issue - Plenty of Opportunity Short-Term and Long-Term suggesting that the stock could fall as it entered its rights trading period. It has. At one point on 20 September the stock was down 7% from time of writing.The time for people to buy and exercise is done, except for professional investors who can turn around their corporate action in a day or less. More discussion below.

Bank Rakyat Indonesia (BBRI) Rights-Related Selldown Basically Done

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

<div>
<p>In this analysis, we provide a detailed overview of investor positioning among 96 active Asia Ex-Japan funds with combined AUM of $80bn.  Highlights:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>The big four of China &amp; HK, Taiwan, South Korea and India dominate holdings in Asia Ex-Japan.  The 4 countries combined account for 85.4% of total allocations, though all but India are held underweight versus the MSCI Asia Ex-Japan index.</li>
<li>China &amp; HK's weight in Asia Ex-Japan funds stands at a 4-year low of 42.96% having fallen heavily from the high of 52% back in August 2020.</li>
<li>Allocations in Indian stocks hit a new all-time high last month of 13.54%.  India has been the go-to overweight holding since the election of Narendra Modi in 2014, though managers are much more closely aligned to benchmark today.</li>
<li>
<p>Indonesian allocations are close to their lowest levels on record.  Only 82.8% of the Asia Ex-Japan managers in our analysis have exposure to Indonesia,  with Comgest, Barings and Vontobel closing exposure over the last 6-months.</p>
</li>
<li>Information Technology dominates the holdings picture, being both the largest sector holding and the largest sector overweight by some distance.  Opposing this are net underweights in Health Care (-1.61%), Materials (-1.25%) and Financials (-1.17%). </li>
<li>The key antagonist in China's tech crackdown, Consumer Discretionary weights have fallen from a high of 21.35% in October 2020 to 16.84% today.  In tandem, active managers have moved from an overweight of 2.18% to an underweight of -0.12%.  Confidence has certainly taken a knock.</li>
</ul>
<p>Also analyzed in more detail:  Thailand, Health Care, Indian Financials, South Korean Consumer Staples, China Financials, <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a> , <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> , <a href="https://www.smartkarma.com/entities/midea-group-co-ltd-a" target="_blank" data-smartkarma-citation="entities:16185:1" rel="noopener">Midea Group Co Ltd A (000333 CH)</a> and <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US).</a></p>
<p><em>Analysis taken from our Asia Ex-Japan research, covering 96 active Asia Ex-Japan funds with combined AUM of $80bn. </em></p>
</div>


In this analysis, we provide a detailed overview of investor positioning among 96 active Asia Ex-Japan funds with combined AUM of $80bn.  Highlights:



The big four of China &amp; HK, Taiwan, South Korea and India dominate holdings in Asia Ex-Japan.  The 4 countries combined account for 85.4% of total allocations, though all but India are held underweight versus the MSCI Asia Ex-Japan index.
China &amp; HK's weight in Asia Ex-Japan funds stands at a 4-year low of 42.96% having fallen heavily from the high of 52% back in August 2020.
Allocations in Indian stocks hit a new all-time high last month of 13.54%.  India has been the go-to overweight holding since the election of Narendra Modi in 2014, though managers are much more closely aligned to benchmark today.

Indonesian allocations are close to their lowest levels on record.  Only 82.8% of the Asia Ex-Japan managers in our analysis have exposure to Indonesia,  with Comgest, Barings and Vontobel closing exposure over the last 6-months.

Information Technology dominates the holdings picture, being both the largest sector holding and the largest sector overweight by some distance.  Opposing this are net underweights in Health Care (-1.61%), Materials (-1.25%) and Financials (-1.17%). 
The key antagonist in China's tech crackdown, Consumer Discretionary weights have fallen from a high of 21.35% in October 2020 to 16.84% today.  In tandem, active managers have moved from an overweight of 2.18% to an underweight of -0.12%.  Confidence has certainly taken a knock.

Also analyzed in more detail:  Thailand, Health Care, Indian Financials, South Korean Consumer Staples, China Financials, Baidu (BIDU US) , Sea Ltd (SE US) , Midea Group Co Ltd A (000333 CH) and JD.com Inc (ADR) (JD US).
Analysis taken from our Asia Ex-Japan research, covering 96 active Asia Ex-Japan funds with combined AUM of $80bn. 


Asia Ex-Japan Positioning:  India & Tech at Record Highs

Indonesia

PT Bank Rakyat Indonesia (Persero) Tbk provides commercial banking activities and its related services. The Bank also provides banking activities based on shariah principles.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Bank Rakyat Indonesia (BBRI IJ)

Indonesia's Banking Sector: The Eight Bank Stocks to Watch For

These eight banks have reasonable valuations and stand ready to benefit from stronger loan demand and rising interest rates, over the medium term.

Ilvin Cornelis

Last Week in Event SPACE: Sembcorp Marine, AusNet, Shinsei Bank, MMC Corp

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Bank Negara Indonesia (BBNI IJ) - Revealing a New Digital Skin

Bank Negara Indonesia (BBNI IJ) has tended to be the laggard amongst the top four Indonesia banks but with a new management team and a more dynamic...

Angus Mackintosh

Asia Ex-Japan Positioning: India & Tech at Record Highs

In this analysis, we provide a detailed overview of investor positioning among 96 active Asia Ex-Japan funds with combined AUM of $80bn.

Steven Holden

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Indonesia's Banking Sector: The Eight Bank Stocks to Watch For

These eight banks have reasonable valuations and stand ready to benefit from stronger loan demand and rising interest rates, over the medium term.

Ilvin Cornelis

Last Week in Event SPACE: Sembcorp Marine, AusNet, Shinsei Bank, MMC Corp

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Bank Negara Indonesia (BBNI IJ) - Revealing a New Digital Skin

Bank Negara Indonesia (BBNI IJ) has tended to be the laggard amongst the top four Indonesia banks but with a new management team and a more dynamic...

Angus Mackintosh

Bank Rakyat Indonesia (BBRI) Rights-Related Selldown Basically Done

BBRI has fallen sharply since the Rights Offer was launched. A decent part of the technical pressure on shares from the offering should be...

Travis Lundy

Asia Ex-Japan Positioning: India & Tech at Record Highs

In this analysis, we provide a detailed overview of investor positioning among 96 active Asia Ex-Japan funds with combined AUM of $80bn.

Steven Holden