In this briefing:
- Indonesia Bull Wedge Targets New Highs
- Asian Telecom Tower Trends: A General Improvement with China Tower Leading the Way
- China’s New Semiconductor Thrust – Part 2: Commodities as a Quick Path to Success
- GEM Active Funds: Big Q1 Outperformance
- The Week that Was in ASEAN@Smartkarma – Jakarta’s MRT, Indonesian Sportswear, and Malaysian Telcos
1. Indonesia Bull Wedge Targets New Highs
We have held a bullish/long position in Indonesia from 6,080 after the breakout above 6,000 resistance and continue to see the macro cycle in a positive light to challenge and clear the 2018 highs.
Bull energy is brewing once again for a bull breakout of the noted wedge that will open the way for the macro bull cycle to resume. Lower wedge support is our preferred buy zone to add to our long position with clear wedge breakout resistance and bull inflection point.
For those not long this offers an excellent risk to reward entry with a controlled stop.
Buy volumes remain healthy and supportive of the macro bull cycle.
Indonesia is our top pick within SE Asia.
2. Asian Telecom Tower Trends: A General Improvement with China Tower Leading the Way
In our latest Asian Tower Trends report, Chris Hoare looks at the listed telecom tower industry across the region. During 4Q18, we became more optimistic on the Asian tower space.
- China: Last December, we upgraded what is by far the largest towerco globally, China Tower (788 HK), after it became clear the story was much better than disclosed at the time of the IPO (still a mystery as to why this happened),
- The Indian tower business has been buffeted by rapid industry consolidation but we think it is now near a bottom, and recently raised Bharti Infratel (BHIN IN) to Neutral, and
- Growth is improving in Indonesia with increased investment ex Java from the smaller operators. Protelindo (TOWR IJ) our preferred name, but Tower Bersama (TBIG IJ) has lagged badly recently and may be due some catch up.
With the 5G investment cycle a key theme for coming years, we are now more constructive on the telecom tower space in general.
3. China’s New Semiconductor Thrust – Part 2: Commodities as a Quick Path to Success
China’s current efforts to gain prominence in the semiconductor market targets memory chips – large commodities. This three-part series of insights examines how China determined its strategy and explains which companies are the most threatened by it.
This second part of the series explains how China chose commodity semiconductors (DRAM and NAND flash memory chips) as the best technology to pursue.
4. GEM Active Funds: Big Q1 Outperformance
Global Emerging Market funds made a strong start to 2019, with just over two-thirds of funds outperforming the benchmark, generating an average alpha above the IShares MSCI Emerging Markets Indx (ETF) (EEM US) of 1.3%.
In this report, we look at the performance of 180 global emerging market strategies over the first quarter of 2019 and analyse the countries, sectors and stocks that helped generate that outperformance. We also take a look at the longer-dated outperformance of active GEM funds.
5. The Week that Was in ASEAN@Smartkarma – Jakarta’s MRT, Indonesian Sportswear, and Malaysian Telcos
This week’s offering of Insights across ASEAN@Smartkarma is filled with another eclectic mix of differentiated, substantive and actionable insights from across South East Asia and includes macro, top-down and thematic pieces, as well as actionable equity bottom-up pieces. Please find a brief summary below, with a fuller write up in the detailed section.
This week’s highlights include value-added comment from Kevin O’Rourke on the ongoing Indonesian Presidential Election campaign, some differentiated comment on the upcoming follow-on offering from Map Aktif Adiperkasa PT (MAPA IJ), as well as the 6th and 7th Insights fromJessica Irene andAngus Mackintosh from the ongoing series of Indonesian Property onIntiland Development (DILD IJ) and Kawasan Industri Jababeka(KIJA IJ). I also include in the detailed section some on-the-ground snapshots from a recent trip to Jakarta, with brief highlights from company visits toNippon Indosari Corpindo (ROTI IJ), Sarimelati Kencana PT (PZZA IJ), andAce Hardware Indonesia (ACES IJ), as well as the first take on Jakarta’s brand new MRT.
Macro Insights
In Widodo Withstands Prabowo’s Debate Pressure / BI Hints at Lower 1Q CAD / Gerindra Prepares Dispute, CrossASEAN Insight Provider Kevin O’Rourke comments on the most important political and economic developments in Indonesia over the past week.
In his global Insight, What Next in the Inflation / Deflation Debate and What Does It Mean for Asset Prices? Stewart Paterson takes a look at this very current subject of debate globally.
Equity Bottom-Up Insights
In the sixth company visit Insight in an ongoing series, Indonesia Property – In Search of the End of the Rainbow – Part 6 – Intiland Development (DILD IJ), CrossASEAN Insight Provider Jessica Irene takes a deep dive into this high-rise and office focused developer. The company is a property developer that focuses on landed residential, industrial estates, high-end condominiums, and offices in Jakarta and Surabaya. DILD has a good track record in building and operating high-end condominiums and offices.
In Indonesia Property-In Search of the End of the Rainbow- Part 7 – Kawasan Industri Jababeka (KIJA IJ) CrossASEAN Insight Provider Angus Mackintosh takes a close look at Indonesia’s oldest Industrial Estate Developer.
In Map Aktif Follow-On Offering – Lace up for a Potential Long Run, Zhen Zhou, Toh runs through the latest details on the proposed follow-on offering for this Indonesian sports retailer.
Sector and Thematic Insights
In the first part in a series of Insights, Quiddity Singapore M&A Guide 2019, Travis Lundy kicks off by taking a look at Singapore from an M&A perspective.
In Company Visits: The Best of March 2019, Thai Guru Athaporn Arayasantiparb, CFA lays out his thoughts on the most interesting company visits he made in the month of March, including Singapore International School of Bangkok (SISB TB), Minor International (MINT TB), and After You Pcl (AU TB) .
In Malaysian Telcos: Look for Improvements to Continue in 2019, our friends at New Street Research revisit the Malaysian Telecoms sector post the recent results.
In Singapore Property – Luxury Segment Leads Price Decline in 1Q; Property Outlook Remains Shaky, Royston Foo revisits the Singapore Property after analysing 1Q19 numbers.
In Singapore REIT – The Draft Master Plan 2019 Boost and Q1 Scorecard, Anni Kum takes a bird’s eye view of the Singapore REIT space after 1Q19 numbers.
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