Local mutual fund ownership Local pension fund ownership Foreign mutual fund ownership

(1)

SMART MONEY

May 2018

By:

Evan Lie Hadiwidjaja

(2)

BANKING SECTOR

Banking Sector

Foreign ownership in banking sector

_{Local mutual fund ownership}

Local pension fund ownership

Foreign mutual fund ownership

In addition to PF accumulation, selling pressure from foreign MF appears to be bottoming. Though foreign ownership is still

deteriorated, some of the capital outflow was due to currency volatility which has stabilized over the past week on the back

of policy rate adjustment by the central bank. Meanwhile, we see banking sector is trading at an attractive valuation.

Source: KSEI, Sinarmas Investment Research

83.2% 82.9% 82.3% 81.6% 81.4% 80.7% 80.0% 80.5% 79.9% 79.2% 78.6% 79.0% 79.9% 79.9% 79.9% 80.3% 81.2% 82.4% 82.2% 82.0%

60.7% 57.4% 57.5% 58.7% 59.7%

60.1% 61.0% 60.8% 60.2% 60.5% 63.3% 63.8%

72.1% 72.0% 72.1% _71.1% 70.1% 69.5% 68.8%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0%

31-Mar-15 30-Apr-15 29-May-15 30-Jun-15 31-Jul-15 31-Aug-15 30-Sep-15 30-Oct-15 30-Nov-15 30-Dec-15 29-Jan-16 29-Feb-16 31-Mar-16 29-Apr-16 31-May-16 30-Jun-16 29-Jul-16 31-Aug-16 30-Sep-16 31-Oct-16 30-Nov-16 30-Dec-16 31-Jan-17 28-Feb-17 31-Mar-17 28-Apr-17 31-May-17 22-Jun-17 31-Jul-17 31-Aug-17 29-Sep-17 31-Oct-17 30-Nov-17 29-Dec-17 31-Jan-18 28-Feb-18 29-Mar-18 30-Apr-18 31-May-18 % Foreign Ownership

3.0% 3.1% 3.3%

3.7% 3.9%

4.3% 4.8% 4.8% 4.9% 4.9%

5.2% 5.0%

4.7% 4.7% 4.6% 4.6% 4.3%

3.3% 3.7% 3.8%

3.9% _3.8% 3.8%

3.0% 2.5%

2.2% 2.0% 2.2%

2.7% 2.4%

2.7%

2.2% 2.0%

2.3% 2.3% 2.7%

3.1% 3.3% 3.5%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%

31-Mar-15 30-Apr-15 29-May-15 30-Jun-15 31-Jul-15 31-Aug-15 30-Sep-15 30-Oct-15 30-Nov-15 30-Dec-15 29-Jan-16 29-Feb-16 31-Mar-16 29-Apr-16 31-May-16 30-Jun-16 29-Jul-16 31-Aug-16 30-Sep-16 31-Oct-16 30-Nov-16 30-Dec-16 31-Jan-17 28-Feb-17 31-Mar-17 28-Apr-17 31-May-17 22-Jun-17 31-Jul-17 31-Aug-17 29-Sep-17 31-Oct-17 30-Nov-17 29-Dec-17 31-Jan-18 28-Feb-18 29-Mar-18 30-Apr-18 31-May-18 %local PF ownership

5.5% 5.5%

5.9% 6.1% 5.9% 6.1% 6.1% 5.9% 6.0% 6.1% 6.2% 6.1% 5.8%

5.5% 5.5% 5.3%

4.9% 4.7%

4.4% 4.3% 4.5% 4.4% 4.5% 4.4% 4.1%

3.9% 3.7% 3.7% _3.6% 3.8%

4.1% 4.2% 4.2% 4.3% _4.2% 4.5% 4.8% 4.8% _4.7%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%

31-Mar-15 30-Apr-15 29-May-15 30-Jun-15 31-Jul-15 31-Aug-15 30-Sep-15 30-Oct-15 30-Nov-15 30-Dec-15 29-Jan-16 29-Feb-16 31-Mar-16 29-Apr-16 31-May-16 30-Jun-16 29-Jul-16 31-Aug-16 30-Sep-16 31-Oct-16 30-Nov-16 30-Dec-16 31-Jan-17 28-Feb-17 31-Mar-17 28-Apr-17 31-May-17 22-Jun-17 31-Jul-17 31-Aug-17 29-Sep-17 31-Oct-17 30-Nov-17 29-Dec-17 31-Jan-18 28-Feb-18 29-Mar-18 30-Apr-18 31-May-18 %local MF ownership

16.6% 16.5% 16.6% 16.3% 16.3% 16.1% 16.0% 16.3% 16.3% 16.1% 16.1% 16.4% 16.8% 17.0% 17.3%

17.7% 18.1% 18.7% 19.0% 19.0% 19.3% 19.3% 19.5% 20.0%

20.7% 21.2% 22.1% 22.0% 21.9% 22.4%

24.1% 24.3% 26.9% 27.1% _26.6%

26.1% 25.6% 25.2% 25.1%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

(3)

Foreign ownership in cement sector

_{Local mutual fund ownership}

Local pension fund ownership

Foreign mutual fund ownership

Source: KSEI, Sinarmas Investment Research

In addition to the selling pressure from local PF and MF, capital inflow from foreign MF has weakened. While we see positive

catalyst as cement players started to increase selling price amidst tight competition, rising commodity prices continue to

pressurize profitability.

BANKING SECTOR

Cement Sector

77.5% 77.9% 77.7% 77.9% 77.8% _77.5% 77.6% 77.5% 77.2% 77.1% 76.8% 77.0% 77.6% 78.0% 77.8% 78.0%

79.7% 84.7% _84.4%

86.1% 85.9% 85.9% 85.9% 86.5% 86.4% 86.3% 86.7% 87.2% 86.8% 86.8%

86.3% 86.8% 86.5% 86.6%

87.2% 87.1% 87.2% 87.3% 87.3%

70.0%

5.2%

3.8%

15.3% 15.6% 17.0%

18.0% 18.1% 17.9%

17.4% 17.8% 17.7% 17.6% 17.5% 17.3% 17.4% 17.5% 17.6% 17.5% 18.0%

18.4% _18.0% 18.3% 18.5% 18.7% 18.9% 19.2% 19.0% 18.8% 19.2% 19.5% 18.8% 19.0% 18.8% 19.2% 19.2% 19.3% 19.5% 19.7% 20.0% 20.0% 19.9%

0.0%

(4)

Source: KSEI, Sinarmas Investment Research

Despite capital outflow in JCI, foreign ownership in consumer staples sector remains stable as it is rather defensive

compared to other sectors. Nonetheless, we continue to like the sector as we see the forthcoming events to bring up

positive sentiments toward rising household consumption.

BANKING SECTOR

Consumer Staples Sector

Foreign ownership in consumer staples sector

_{Local mutual fund ownership}

Local pension fund ownership

Foreign mutual fund ownership

39.1% 39.0% 38.6%

37.3% 37.2% 36.8% 36.6% 36.4% 36.4% 36.4% 36.5% 36.6% 36.3% 36.7% 36.7% 37.2% 37.8% 45.1% 44.9%

40.3% 39.1%

37.9% 37.8% 37.6% 37.3% 37.5% 40.4%

36.5% 36.7% 36.7% 36.5% 37.1% 37.0% 37.0% 37.1% 36.9% 39.6% _39.0%

38.7%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

3.0% 3.1% 3.1% 3.2% 3.2% 3.3%

3.4% 3.4% 3.4% 3.4% 3.4% _3.3% 3.4% 3.2% 3.2% 3.1% 3.1%

2.9% 2.9% 3.1% 3.2% 3.3%

3.3% 3.6% 3.7%

3.7% 3.8% 4.0%

4.4% 4.0%

3.9% 3.9% 3.9% 4.0% 4.1% 4.3%

4.4% 4.4% 4.4%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%

3.8% 3.9% 4.2% 4.3% 4.3%

4.6% 4.6% 4.5% _4.5% 4.5% 4.6% 4.3% 4.3% 4.3% 4.4%

4.1% 3.7%

4.2% 4.2% 4.4% 4.5%

4.6% 4.6% 4.4% _4.3%

4.1% 4.1% 4.2% _4.1% 4.4%

4.6% 4.4%

4.3% 4.1%

4.0% 3.8% 3.9% 3.9% 3.9%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%

7.8% 7.8% 7.9% 8.0% 7.9% 7.6%

7.4% 7.4% 7.7%

7.9% 8.0% 8.1% 7.9% 8.3% 8.3% 8.6% 8.9%

8.2% 8.3% 9.0% 8.9% _8.8%

8.7% 8.6% 8.5% 8.9%

9.3% 9.5% 9.8% 9.8% 9.7% 9.4% 9.7%

10.0% 10.1% 10.1% 10.0% 10.1% 10.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

(5)

Source: KSEI, Sinarmas Investment Research

We see foreign ownership to inch down in May which we suspect due to below-than-expected result from ADRO. However,

we remain bullish in coal sector as demand for coal will increase entering the summer season. On another note, Newcastle

coal price touched $111/Mt last Friday, record high for the past 2 years.

BANKING SECTOR

Coal Sector

Foreign ownership in coal sector

_{Local mutual fund ownership}

Local pension fund ownership

Foreign mutual fund ownership

28.7% 29.1%

25.5% 25.6% 25.6% 25.8% 25.9% 25.8%

26.1% 27.9% 27.9% 28.1%

27.3% 27.2% 26.0% 26.0% _25.9%

25.9% 25.9%

2.8% 2.8% 2.8% 2.8% _2.8%

2.3%

5.7% 5.8% 5.8% 5.9%

(6)

CONSTRUCTION SECTOR

Source: KSEI, Sinarmas Investment Research

Despite deterioration in local MF and PF ownerships, we believe the sector’s performance will improve as cash flow has been

experiencing a turnaround through faster project executions. Additionally, valuations are at multi-year low levels, which

boosts attractiveness to the sector.

BANKING SECTOR

Construction Sector

Foreign ownership in construction sector

_{Local mutual fund ownership}

Local pension fund ownership

Foreign mutual fund ownership

35.2% 36.0% _34.4% 33.6% 34.9% 34.2% 35.3%

35.9% 36.4% 35.4%

37.1% 37.8% 38.6% 39.4%

38.4% 39.5% 42.0% 42.9%

40.2% 39.7%

38.3% 38.2% _37.4% _37.5% 38.6% 39.7%

41.3% 41.2% 41.0% 40.8% 40.8% 42.1% 41.7% 40.6% 41.6% 41.7% 40.2% 40.0% 39.4%

0.0%

25.0% 25.4%

26.6% 26.9% 27.3% 27.5% 27.2% _26.1% _26.1% 25.7% 25.8%

24.8% 24.2% 24.9% 24.4%

23.0% 21.4%

19.9% 19.6% 19.4% 19.2% 20.3% 20.4%

18.5% 16.6%

15.1% 13.8% 13.5% 13.8% _13.3%

13.0% 12.8% 12.7% 13.4% 15.1%

25.0% 25.4%

26.6% 26.9% 27.3% 27.5% 27.2% _26.1% _26.1% 25.7% 25.8%

24.8% 24.2% 24.9% 24.4%

23.0% 21.4%

19.9% 19.6% 19.4% 19.2% 20.3% 20.4%

18.5% 16.6%

15.1% 13.8% 13.5% 13.8% _13.3%

13.0% 12.8% 12.7% 13.4% 15.1%

10.2% 10.3% 9.3%

8.9% 8.9% 8.9% 9.2% 9.8% 10.3% 9.8%

11.5% 12.0% 12.1% 12.3%

12.4% 12.8% 12.6% 12.4% 12.3% 12.5% 12.2% 12.3% 12.2%

11.7% 11.6% 12.0% 12.0% 12.1% 12.5% 12.9% 12.4% 12.3%

12.1%

(7)

We see an uptick in foreign ownership and gradual accumulation from local MF as we expect a boost on media ad spending

due to Lebaran and upcoming World Cup & Asian Games.

BANKING SECTOR

Media Sector

Foreign ownership in media sector

_{Local mutual fund ownership}

Local pension fund ownership

Foreign mutual fund ownership

Source: KSEI, Sinarmas Investment Research

30.1%

32.3% 32.3% 32.3% 32.4% 32.4% 32.4% 32.6% 32.5% 32.5% 32.7% 32.9%

0.5%

2.6%

9.4%

(8)

Regardless of local MF accumulation, we see lack of catalyst in the sector. CPO price tends to benefit from rising oil price,

though the impact is minimal as correlation between the two commodities has weakened.

BANKING SECTOR

Plantation Sector

Source: KSEI, Sinarmas Investment Research

Foreign ownership in plantation sector

_{Local mutual fund ownership}

Local pension fund ownership

Foreign mutual fund ownership

37.0% 38.9%

36.7% 33.6% 34.6%

35.0% _34.4% 36.2% 34.6% 34.7% 34.5% 35.7% 37.2% 36.9%

35.7% 33.4% 33.0%

30.4%

28.8% 28.4% 29.0% 29.3% 29.6% 30.8% 31.0% 30.7%

32.6% 32.7% 33.1% 31.2%

30.1% 31.3%

32.3% 32.4% 33.0% 33.4% 32.5% 32.9% 32.1%

12.3% 12.2% 12.3% 12.3% 12.4% 12.3% 12.2%

11.0% _10.7% 10.8% _10.6% 10.5% _10.3%

10.3% 10.4% 10.6% 10.7% 10.8%

12.2% 12.3%

11.0% 10.9% 11.2% 11.2% 11.1% 11.0% 10.6% 10.5% 10.5%

10.2% 10.3% 10.4% 10.4%

13.2% 13.2% 13.1% _12.9% _12.9% 13.0%

0.0%

11.5%

10.8% 10.7% 10.6% 11.1% 11.4%

10.5% 13.8% 14.0% 14.4%

16.5%

11.4% 11.5%

10.5% 10.8% 11.0% 11.7% 12.1%

12.6% 11.9%

11.0% 11.0% 10.0% 10.1% 10.4%

11.1% 11.4% 11.6%

10.8% 10.7%

10.4% 10.8% 10.8% 10.8% 10.2% 10.2% 10.6% 10.6% 10.5% 11.1% 11.2% 11.3%

11.9% 11.9%

(9)

We take neutral stance on the sector due to challenging outlook stemmed by 50 bps of policy rate hike, which may have an

impact to demand and higher cost of fund.

BANKING SECTOR

Property Sector

Source: KSEI, Sinarmas Investment Research

Foreign ownership in property sector

_{Local mutual fund ownership}

Local pension fund ownership

Foreign mutual fund ownership

44.2% 44.1%

42.9% 43.8% 43.3% 43.0% 43.1% 43.5% _42.9% _43.0% _42.8% 43.4% 44.5% 45.0% 44.5% 44.5% 45.3%

45.8% 45.5% 45.9% 45.3% 45.3% 45.2% 45.5% 45.7% 46.6% 47.5%

42.7% 41.0% 40.9% 40.5%

39.5% _38.7%

35.2% 35.3% 35.0% 34.9% 34.9% 34.7%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

2.0% 2.0% 2.0% 2.1% 2.1% 2.2%

2.2% 2.1% 2.1%

2.1% 2.1% 2.1% 1.9%

1.8% 1.7%

1.6% _1.5% 1.5%

1.6% 1.8%

1.9% 1.9%

2.0% 2.0% 2.1% 2.1%

2.0% 2.0% 2.0% _2.0% _2.0% 1.9%

1.9% 1.9% 1.9% 2.0% 2.0% 2.0% 2.0%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5%

7.1% 7.3% 7.8% 7.9% 7.8%

7.6% 7.3% 7.4%

7.8% 7.9% 7.8% 7.2%

6.8% 6.8% 7.3%

7.6%

6.9% 6.2% _6.0%

5.4% 5.5% 5.0%

5.7% _5.5% 5.0%

4.6%

4.1% 4.0% _3.9% 4.0% 4.0% 3.8% _3.7% 4.0% 4.1%

4.4% 4.6% 4.6% 4.5%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0%

9.7% 9.5% 8.9% 8.8% 8.8% _8.6%

8.4% 8.6%

8.4% 8.5% 8.3% 8.6% 8.7% 9.0% 8.9%

9.4% 10.4% 10.7%

10.1% 10.1%

9.8% 9.7% 9.9% 10.1% 10.2%

10.5% 10.8% 10.8% 10.8% 10.8% 10.7% 10.7% 10.6% 10.6% 10.6% _10.5% _10.5% 10.6% 10.5%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

(10)

RETAIL SECTOR

Source: KSEI, Sinarmas Investment Research

Foreign capital outflow in ACES and RALS weighed down aggregate foreign sector ownership due to currency volatility

concerns on ACES (-2.5% YTD USD/IDR and -3.8% YTD CNY/IDR) and demanding valuation on RALS (20.3x FY18E PE).

BANKING SECTOR

Retail Sector

Foreign ownership in retail sector

_{Local mutual fund ownership}

Local pension fund ownership

Foreign mutual fund ownership

72.9%

1.1% 1.1%

4.8% _4.7%

29.0%

28.1% 27.9% 28.5% 28.8% 28.5% 28.1% 27.7% 28.7%

29.8% 30.1% 30.5% 30.2% 30.2% 31.2% 31.8% 32.2% 33.2%

34.0%

35.3% 35.9% 35.6% 35.4% 35.2% 34.9% 34.7% 35.4% 35.8% 36.0% 36.1% 35.7% 36.2% 35.8% 35.7% 36.8%

37.1% 36.8% 37.6% 36.3%

0.0%

(11)

TELECOMMUNICATION SECTOR

Source: KSEI, Sinarmas Investment Research

Oversold and attractive. We see a turnaround on foreign MF ownership followed by stronger local MF accumulation. We

expect an increase in data pricing before Lebaran and continuous growth in data traffic will bring positive sentiment to the

sector, which has been trading at

–

1.5x SD below 5-yr average EV/EBITDA.

BANKING SECTOR

Telecommunication Sector

Foreign ownership in telecommunication sector

_{Local mutual fund ownership}

Local pension fund ownership

Foreign mutual fund ownership

83.1% 82.0%

81.3% 81.7% 81.7% 81.8% 81.5% 81.5% 81.5%

82.3% 82.1% 82.5% 82.2% 82.7% 82.6% 83.4%

85.0% 85.3% 84.9% 85.3% 83.8%

3.7%

4.7%

18.3% 17.4%

16.7% 16.8% 16.7% 16.7% 16.7% 16.9% 17.2% 18.7% 18.8%

19.9% 20.0% 20.4%

20.8% 20.5% 21.0% 21.1% 21.3%

21.7% 21.6% 21.6% 21.3% 21.2% 21.6%

22.1% 22.6% _21.7% 22.2% 22.7% 22.8% 22.4% 21.5% 21.2%

20.6% 20.8% 20.7% 21.1% 21.4%

0.0%

(12)

TOBACCO SECTOR

Selling pressure from foreign MF may serve as a headwind to the sector despite gradual accumulation from local MF and

local PF as the sector experienced significant correction due to concerns on weak volume growth.

BANKING SECTOR

Tobacco Sector

Foreign ownership in tobacco sector

_{Local mutual fund ownership}

Local pension fund ownership

Foreign mutual fund ownership

Source: KSEI, Sinarmas Investment Research

65.6% 66.1% _65.1% 64.1% 64.3% 64.6% 65.1%

62.9% 64.5% 64.5% 63.6% 63.4% 61.7% 61.9% 62.8%

56.7% 56.9% 57.7% 57.1% 56.8% 55.5%

41.6% 41.5% 40.9% 41.7% 41.4% 42.3% 41.5% 41.4% 40.7% 40.1% 40.0% 40.4% 39.9% 40.0% 37.5%

34.8% 32.3%

30.3%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

2.8%

2.3% 2.4% 2.3% 2.3% 2.3% 2.3% 3.1%

3.0% 3.0% 3.2% 3.0% 3.1% 3.1% 2.9%

4.0% 4.0% 3.9% 4.0% 4.0% 4.1% 4.2% 4.3% 4.4%

4.2%

4.4% 4.4% 4.4% 4.5% 4.4% 4.3% 4.2% _4.1% 4.2%

4.5% 4.6% 4.8% 5.0%

5.2%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%

13.1% 13.5% 13.0% 14.2% 15.0% 14.6% 14.4%

16.6% 16.0% 16.3% 17.0%

17.9% 18.4% 18.2% 17.7%

20.0% 19.4% _18.9%

17.2% 17.1% 17.7% 18.3% 18.2% 17.9%

17.2% 17.0% 15.9% 16.2% 15.8%

16.9% 18.1% 19.0% 18.7%

19.1% 19.1% 21.6%

23.7% 25.1%

26.8%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

19.6% 19.6% 19.6% 20.1% 20.2% 20.1% 19.4% 21.3% 21.1%

20.5% 19.8%

21.8% 20.3%

19.7% 20.2%

17.3% 17.3% 17.4% 17.4% 17.5% 18.0% 17.3% _17.0%

16.6% 17.4% 17.1% 16.9% 17.5%

17.8% 18.2% 18.2% 18.3% 18.4% 18.1% 17.9% 16.6%

14.9% 13.0%

11.8%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

(13)

INDEX MEMBERS

Sector

Members

Banking

BBRI, BBNI, BMRI, BBCA, BBTN

Cement

INTP, SMGR

Consumer Staples

UNVR, INDF, ICBP, MYOR, KLBF, ROTI

Coal

ADRO, PTBA, ITMG, HRUM, UNTR, DOID

Construction

PTPP, ADHI, WIKA, WSKT

Media

SCMA, MNCN

Plantation

AALI, LSIP

Property

BSDE, SMRA, ASRI, CTRA, PWON

Retail

ACES, MAPI, LPPF, RALS

Telecommunication

TLKM, EXCL

Tobacco

HMSP, GGRM

(14)

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Further, the Sinarmas Group, and/or its officers, directors and employees, including persons, without limitation, involved in the preparation or issuance of this material

may, to the extent permitted by law and/or regulation, have long or short positions in, and buy or sell, the securities (including ownership by Sinarmas Group), or

derivatives (including options) thereof, of companies under our coverage, or related securities or derivatives. In addition, the Sinarmas Group, including Sinarmas

Sekuritas, may act as market maker and principal, willing to buy and sell certain of the securities of companies under our coverage. Further, the Sinarmas Group may

buy and sell certain of the securities of companies under our coverage, as agent for its clients.

Investors should consider this report as only a single factor in making their investment decision and, as such, the report should not be viewed as identifying or

suggesting all risks, direct or indirect, that may be associated with any investment decision. Recipients should not regard this report as substitute for exercise of their

own judgment. Past performance is not necessarily a guide to future performance. The value of any investments may go down as well as up and you may not get back

the full amount invested.

Sinarmas Sekuritas specifically prohibits the redistribution of this material in whole or in part without the written permission of Sinarmas Sekuritas and Sinarmas

Sekuritas accepts no liability whatsoever for the actions of third parties in this respect. If publication has been distributed by electronic transmission, such as e-mail, then

such transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain

viruses. The sender therefore does not accept liability for any errors or omissions in the contents of this publication, which may arise as a result of electronic