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

Thematic (Sector/Industry)

<ul>
<li>Indonesian Digital Banks are an increasing focus for investors given their potential to serve the huge numbers of underbanked in Indonesia through tapping into e-commerce and fintech ecosystems and customers.</li>
<li>Players such as <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago,</a><a href="https://www.smartkarma.com/entities/allo-bank-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:33551:1" rel="noopener">Allo Bank Indonesia</a>, <a href="https://www.smartkarma.com/entities/pt-bank-neo-commerce-tbk" target="_blank" data-smartkarma-citation="entities:15245:1" rel="noopener">PT Bank Neo Commerce,</a> and <a href="https://www.smartkarma.com/entities/bank-rakyat-indo-agroniaga" target="_blank" data-smartkarma-citation="entities:16626:1" rel="noopener">Bank Rakyat Indo Agroniaga</a> lead the field with the potential to tap their respective potential ecosystems.</li>
<li>We prefer <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago</a> and <a href="https://www.smartkarma.com/entities/allo-bank-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:33551:1" rel="noopener">Allo Bank Indonesia</a>, given the former's exposure to the <a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo</a>'s ecosystem and the latter's to CT Corp, <a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak</a>, and <a href="https://www.smartkarma.com/entities/grab-holdings-inc" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (GRAB US)</a>. </li>
</ul>


Indonesian Digital Banks are an increasing focus for investors given their potential to serve the huge numbers of underbanked in Indonesia through tapping into e-commerce and fintech ecosystems and customers.
Players such as Bank Jago,Allo Bank Indonesia, PT Bank Neo Commerce, and Bank Rakyat Indo Agroniaga lead the field with the potential to tap their respective potential ecosystems.
We prefer Bank Jago and Allo Bank Indonesia, given the former's exposure to the GoTo's ecosystem and the latter's to CT Corp, Bukalapak, and Grab (GRAB US). 


Indonesian Digital Banks - Ecosystems and Channels

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

Event-Driven

GoTo Gojek Tokopedia Tbk PT / Event-Driven

<ul>
<li>The IDX has announced that <a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo (GOTO IJ)</a> will be included in the IDX30, LQ45 and IDX80 indices at a float of <strong>66.4%</strong> at the close on 7 June.</li>
<li>
<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> will be deleted from the IDX30 and LQ45 indices, while <a href="https://www.smartkarma.com/entities/buyung-poetra-sembada-pt" target="_blank" data-smartkarma-citation="entities:28454:1" rel="noopener">Buyung Poetra Sembada PT (HOKI IJ)</a> will be deleted from the IDX80 index.</li>
<li>Passive trackers need to buy around 12.78% of the real float on <a href="https://www.smartkarma.com/entities/goto-gojek-tokopedia" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo (GOTO IJ)</a>. Add the impact from open ended funds and that could move up to 20%. </li>
</ul>


The IDX has announced that GoTo (GOTO IJ) will be included in the IDX30, LQ45 and IDX80 indices at a float of 66.4% at the close on 7 June.

Waskita Karya (Persero) (WSKT IJ) will be deleted from the IDX30 and LQ45 indices, while Buyung Poetra Sembada PT (HOKI IJ) will be deleted from the IDX80 index.
Passive trackers need to buy around 12.78% of the real float on GoTo (GOTO IJ). Add the impact from open ended funds and that could move up to 20%. 


GoTo Index Inclusion: Fast Entry to IDX30, LQ45, IDX80 Confirmed; BIG Buying Next Week

Cross Asset Strategy

<div>
<p>The overall Indonesian market has traded sideways this year, rising by only +2.45% YTD, despite a strong economic recovery in 2Q2021. This is mainly due to the Emergency PPKM measures put in place as the COVID-19 cases spiked in June, with strict measures coming into effect on 3rd July</p>
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<p>In fact, new cases peaked out in Indonesia on 15th July and have been on a steep decline since herd immunity and increased vaccinations helped to calm the situation.</p>
<p>Recent conversations with retailers such as <a href="https://www.smartkarma.com/entities/mitra-adiperkasa-tbk-pt" target="_blank" data-smartkarma-citation="entities:18684:1" rel="noopener">Mitra Adiperkasa (MAPI IJ),</a> <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>, and <a href="https://www.smartkarma.com/entities/pt-matahari-department-store" target="_blank" data-smartkarma-citation="entities:5230:1" rel="noopener">Matahari Department Store (LPPF IJ)</a> reveal a significantly improved picture in August.</p>
<div>One positive impact from last year's pandemic is that companies in a number of different sectors have adopted operational policies that allow them to operate more efficiently even in a lockdown situation.</div>
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<div>With the Indonesian market massively under-owned by foreign investors, we see this recent market correction as an opportunity.  Foreigner positioning is at the lowest level in a decade, which suggests potential inflows as recovery comes through.</div>
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<div>We recommend buying banks, autos, retailers, cement, digital economy proxies, telcos as data enablers, and property as a reflation trade. We remain positive on healthcare but see some pricing risk for testing services and declining COVID-19 related revenues. </div>
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The overall Indonesian market has traded sideways this year, rising by only +2.45% YTD, despite a strong economic recovery in 2Q2021. This is mainly due to the Emergency PPKM measures put in place as the COVID-19 cases spiked in June, with strict measures coming into effect on 3rd July

In fact, new cases peaked out in Indonesia on 15th July and have been on a steep decline since herd immunity and increased vaccinations helped to calm the situation.
Recent conversations with retailers such as Mitra Adiperkasa (MAPI IJ), Ace Hardware Indonesia (ACES IJ), and Matahari Department Store (LPPF IJ) reveal a significantly improved picture in August.
One positive impact from last year's pandemic is that companies in a number of different sectors have adopted operational policies that allow them to operate more efficiently even in a lockdown situation.


With the Indonesian market massively under-owned by foreign investors, we see this recent market correction as an opportunity.  Foreigner positioning is at the lowest level in a decade, which suggests potential inflows as recovery comes through.

We recommend buying banks, autos, retailers, cement, digital economy proxies, telcos as data enablers, and property as a reflation trade. We remain positive on healthcare but see some pricing risk for testing services and declining COVID-19 related revenues. 










CrossASEAN Indonesia Strategy - The Stars Are Aligned

<ul>
<li>The past week saw insights on <a href="https://www.smartkarma.com/entities/grab-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab Holdings (GRAB US)</a>, <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia (BBRI IJ)</a>, <a href="https://www.smartkarma.com/entities/sariguna-primatirta-tbk-pt" target="_blank" data-smartkarma-citation="entities:33584:1" rel="noopener">Sariguna Primatirta (CLEO IJ)</a>, <a href="https://www.smartkarma.com/entities/metrodata-electronic-pt" target="_blank" data-smartkarma-citation="entities:7184:1" rel="noopener">PT Metrodata Electronics (MTDL IJ)</a>, and <a href="https://www.smartkarma.com/entities/pt-selamat-sempurna-tbk" target="_blank" data-smartkarma-citation="entities:10909:1" rel="noopener">Selamat Sempurna (SMSM IJ)</a>.</li>
<li>There were also macro insights on inflation in the Philippines and Malaysia and further insights On <a href="https://www.smartkarma.com/entities/best-world-international-ltd" target="_blank" data-smartkarma-citation="entities:4600:1" rel="noopener">Best World International (BEST SP)</a>, <a href="https://www.smartkarma.com/entities/pt-ecocare-indo-pasifik-tbk" target="_blank" data-smartkarma-citation="entities:43693:1" rel="noopener">Ecocare Indo Pasifik (HYGN IJ)</a> and <a href="https://www.smartkarma.com/entities/malaysia-airports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:117:1" rel="noopener">Malaysia Airports Holdings</a>.</li>
<li>The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across Southeast Asia.</li>
</ul>


The past week saw insights on Grab Holdings (GRAB US), Bank Rakyat Indonesia (BBRI IJ), Sariguna Primatirta (CLEO IJ), PT Metrodata Electronics (MTDL IJ), and Selamat Sempurna (SMSM IJ).
There were also macro insights on inflation in the Philippines and Malaysia and further insights On Best World International (BEST SP), Ecocare Indo Pasifik (HYGN IJ) and Malaysia Airports Holdings.
The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across Southeast Asia.


The Week That Was in ASEAN@Smartkarma - Grab's Lead, Bank Rakyat Indonesia, and CLEO's Pure Water

External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

<ul><li>Based on the MSME and consumer segments, BPR, and P2P data, we believe banks’ overall asset quality remains robust.</li><li>With higher FY24F CoC of 3.0%, BBRI has allocated adequate provisions to address the current issue in its MSME segment.</li><li>Maintain Overweight rating in the banking sector with BBCA remaining as our top pick.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Based on the MSME and consumer segments, BPR, and P2P data, we believe banks’ overall asset quality remains robust.With higher FY24F CoC of 3.0%, BBRI has allocated adequate provisions to address the current issue in its MSME segment.Maintain Overweight rating in the banking sector with BBCA remaining as our top pick.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Banks: Attractive Entry Point Amid Valuation Derating, Supported by the Still Robust Asset Quality

Indonesia

PT Bank Mandiri (Persero) Tbk is formed by the merger of four state-owned banks, namely Pt Bank Bumi Daya, PT Bank Dagang Negara, PT Bank Ekspor Import Indonesia (Bank Exim), PT Bank Pembangunan Indonesia (Bank Bapindo). The Bank operates in the commercial banking services.

PT Bank Central Asia Tbk provides banking and related services.  The Bank also provides custodianship, trusteeship, and management of pension funds of financial institutions.  Through its subsidiaries, the Bank also provides leasing and consumer financing services.

PT Bank Negara Indonesia (Persero) Tbk is a state-owned bank that conducts commercial and consumer banking services.

PT Bank Syariah Indonesia Tbk. operates as a bank. The Bank offers checking accounts, credit and debit cards, loans, insurance, payment protection, phone banking, bill pay, fund transfer, and merchant services. Bank Syariah Indonesia serves customers in Indonesia.

PT Bank Mega Tbk provides banking services. Through its subsidiary the Company also provides bonds and shares underwriting, stock broking, investment management, consultation services, and other activities related to the capital market.

PT Bank CIMB Niaga Tbk operates in individual and private banking, merchant and corporate banking, regional banking, and investment services.  The Bank also provides financial services such as leasing and factoring, stock broking, underwriting, insurance and investment management through its subsidiaries.

PT Bank Permata Tbk provides commercial and foreign exchange banking services through a network of offices in Indonesia.  The Bank also performs custodianship and trusteeship services as well as manages pension funds.

Bank Danamon Indonesia Tbk PT provides general banking services. The Bank's head office is located in Jakarta with branch offices throughout Indonesia.

PT Bank Tabungan Pensiunan Nasional Tbk. is a financial institution that specializes in funding and lending. The Bank offers accounts in deposits & savings, pension loans, small to medium sized business loans, and other financial products.  Bank Tabungan offers services in bank clearance, payment, collection, transfer, and payroll services.

Bank Tabungan Pensiunan Nasional (BTPN IJ)

PT Bank Panin Indonesia Tbk provides commercial banking and foreign exchange services in Indonesia and overseas.

United Overseas Bank Limited provides a wide range of financial services including personal financial services, wealth management, private banking, commercial and corporate banking, transaction banking, investment banking, corporate finance, capital market activities, treasury services, futures broking, asset management, venture capital management and insurance.

Oversea-Chinese Banking Corporation Limited offers a comprehensive range of financial services.  The Company's services include deposit-taking, corporate, enterprise and personal lending, international trade financing, investment banking, private banking, treasury, stockbroking, insurance, credit cards, cash management, asset management and other financial and related services.

Kotak Mahindra Bank Limited is a full service commercial bank. The Bank offers a wide range of products and services such as personal, commercial, and corporate banking services, including deposit accounts, loans, and investments. Kotak Mahindra Bank serves customers in India.

Fifth Third Bancorp is a diversified financial services company that operates banking centers in the Midwestern and Southeastern regions of the United States. The Company's principal businesses include retail banking, commercial banking, investment advisory, and data processing.

Mizuho Financial Group, Inc. provides comprehensive financial services through its subsidiaries. The Group provides variety of financial services such as general banking, securities brokerage, trust banking, and assets management.

BOC Hong Kong (Holdings) Limited provides a comprehensive range of financial products and services to retail and corporate customers.  Its products include retail banking, corporate banking, and treasury services.  The Company operates its branches in Hong Kong and China.

Bank of Nova Scotia provides retail, commercial, international, corporate, investment and private banking services and products.

Ping An Bank Co Ltd provides a full range of commercial banking services including RMB and foreign currency deposit, loan, international and domestic settlement, discount, currency trading, letter of credit, bank guarantee, and other related services.

Shanghai Pudong Development Bank Co., Ltd. provides banking services. The Company provides loans, deposits, accounts settlement, foreign exchange, and other services. Shanghai Pudong Development Bank provides its services to individuals, companies, and other groups.

Shanghai Pudong Development Bank Co. (600000 CH)

Axis Bank Limited provides a full range of banking services throughout India. The Group's activities include retail banking, investment management, merchant banking, treasury and NRI services, cash and credit management services, and ATM facilities.

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

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Bank Rakyat Indonesia (BBRI IJ)

Indonesian Digital Banks - Ecosystems and Channels

Indonesian Digital Banks are an increasing focus for investors with the potential to serve the huge numbers of underbanked in Indonesia through...

Angus Mackintosh

GoTo Index Inclusion: Fast Entry to IDX30, LQ45, IDX80 Confirmed; BIG Buying Next Week

IDX will add GOTO to the IDX30, LQ45 & IDX80 indices at the close on 7 June. A float of 66.4% (vs 4% real float) will require passive trackers to...

Brian Freitas

CrossASEAN Indonesia Strategy - The Stars Are Aligned

Indonesia has been through the worse in terms of the recent covid surge and is now on the cusp of a steep recovery at a time when foreign weighting...

Angus Mackintosh

The Week That Was in ASEAN@Smartkarma - Grab's Lead, Bank Rakyat Indonesia, and CLEO's Pure Water

The past week saw insights on Grab Holdings (GRAB US), Bank Rakyat Indonesia (BBRI IJ), Sariguna Primatirta (CLEO IJ), PT Metrodata Electronics...

Angus Mackintosh

Banks: Attractive Entry Point Amid Valuation Derating, Supported by the Still Robust Asset Quality

With higher FY24F CoC of 3.0%, BBRI has allocated adequate provisions to address the current issue in its MSME segment. Maintain Overweight rating...

BRI Danareksa Research

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