Banking Cement Consumer Staples Coal Construction Media Plantation Property Retail Telecommunication Tobacco

(1)

SMART MONEY

September 2018

By:

Evan Lie Hadiwidjaja

(2)

BANKING SECTOR

Heat Map

Source: KSEI, Sinarmas Investment Research

Degree of changes in ownership

+

-

Notes:

PF = Pension Fund

MF = Mutual Fund

IS = Insurance

IB = Investment Banking

Monthly Changes (%)

Local PF

Local MF

Local IS

Local IB

Foreign PF

Foreign MF

Foreign IS

Foreign IB

Banking

Cement

Consumer Staples

Coal

Construction

Media

Plantation

Property

Retail

Telecommunication

(3)

BANKING SECTOR

Banking Sector

Average foreign ownership in the banking sector

_{Average local mutual fund ownership}

Average local pension fund ownership

Average foreign mutual fund ownership

While foreign flow continued to stabilize over the course of September, persisting currency volatility weighs the market

sentiment on banking sector. In addition, we turn cautious on 3Q18 results as margins may deteriorate stemmed by 150

bps policy rate hike YTD and accelerating TD spurred by liquidity scarcity which can be seen in 8M18 results.

Source: KSEI, Sinarmas Investment Research

76.9%76.9%76.5%75.7%75.5%

74.5%73.7%74.4%73.8%73.0%72.4%73.3%74.8%75.0%75.1%75.6%76.7%78.3%78.2%77.8%

67.7%_66.1%66.5%68.2%69.6%69.7%70.5%70.2%69.2%69.9%69.9%70.5%71.1%71.5%71.7%71.1%70.3%69.4%68.3% 66.9%65.7%65.2%65.1%

% Foreign Ownership

4.5% 4.4%4.6%

Average of % local PF

7.8% 7.8%

Average of % local MF

19.1%18.9%19.2%18.9%18.9%18.8%18.7%19.0%19.0%18.8%18.7%19.1%19.8%20.1% 20.4%21.0%21.5%

22.1%22.4%22.4%22.7%22.7%23.0% 23.7%

24.8%25.1%25.9%25.8%25.6%26.1%26.1%26.2%26.1% 26.7%26.4%26.2%

(4)

Source: KSEI, Sinarmas Investment Research

We see continuing accumulation by local MF as major cement players finally increased ASP gradually. Nonetheless, we view

the ASP hike may be partially muted due to rising commodity prices especially oil. To note, we also see positive sentiment

coming from potential consolidation.

BANKING SECTOR

Cement Sector

Average foreign ownership in the cement sector

_{Average local mutual fund ownership}

Average local pension fund ownership

Average foreign mutual fund ownership

77.4%77.8%77.6%77.9%77.7%_{77.4%77.5%77.3%77.1%} 76.9%76.6%76.8%77.4%

77.9%77.6%77.8% 79.3%

83.9%83.6%

85.2%84.9%85.0%85.0%85.6%85.5%85.4% 85.9%86.3%85.8%85.8%

85.2%85.7%85.5%85.5%

86.2%86.1%86.3%86.3%86.4%86.1%86.0%

% Foreign Ownership

5.5%

3.9%

16.2%16.5%

18.0%18.9%19.0%18.8%18.4%18.7%18.7%18.5%18.4%18.2%18.2%18.2%18.4%18.3%18.8%

19.2%_18.8%19.2%19.4%19.6%19.8%20.1%19.8%19.6%20.0% 20.4%

19.6%19.8%19.5%19.9%20.0%20.1%20.3%

20.6%20.9%20.9%20.7%21.5%21.4%20.7%20.4%

0.0%

(5)

Source: KSEI, Sinarmas Investment Research

We see slight decline in local PF and MF due to concerns on IDR depreciation given that the majority of

staples’

raw

materials are soft commodities which are usually linked to the USD. Hence, it potentially leads to further margin

compression.

BANKING SECTOR

Consumer Staples Sector

Average foreign ownership in the consumer staples sector

_{Average local mutual fund ownership}

Average local pension fund ownership

Average foreign mutual fund ownership

63.6%62.6%

61.8%61.3%60.9%_{60.1%60.3%60.4%60.2%60.0%59.8%60.1%59.6%59.7%59.7%60.2%}61.1%62.0%62.0% 59.0%

57.6%

55.6%55.2%54.7%54.4%54.2%55.5%54.2%54.3%54.0%_{53.6%53.9%53.8%53.7%53.9%53.4%53.5%52.8%52.3%51.8%51.7%52.2%52.6%}

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

% Foreign Ownership

4.0%

4.4% 4.5%4.5% 4.6%4.7% 4.7% 4.6% 4.5%4.4% 4.3%_{4.2% 4.2%} 4.0%

3.8% 3.7% 3.7% 3.4% 3.3%

3.8% 4.2%

4.6% 4.7% 5.1% 5.2%5.4% 5.3%

5.8%

6.5% 6.4% 6.4% 6.5%6.7% 6.9%7.1%

7.5%7.8% 7.8% 7.9% 8.0% 7.9%

7.8% 7.7%

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

7.9%8.1% 8.8%9.1%

9.3% 9.9% 9.8%

9.5% 9.5% 9.7%9.9% 9.9% 10.0% 10.1%10.3%_9.9%

9.1% 8.6%

8.3% 9.7%10.2%

11.0%11.1%

10.8%10.6%10.5%10.6%10.6% 10.2%10.6%

10.9%10.9%10.7%_10.6%

10.2%10.2%10.5%10.6%10.8%10.8%10.8%10.7%10.6%

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

12.8% 12.5%12.3%12.1%

11.5%

11.0%10.9%11.0%11.3%11.2%11.3%

11.6%_11.4%11.5%11.6%11.7%12.0%12.1%11.8% 12.5%

12.1%11.9%

11.7%11.5%11.4%11.5%11.8%11.8%11.9%11.9%11.7%

11.3%11.4%11.5%11.3%11.2% 10.9%10.9%

10.5%10.4%10.2% 10.0%10.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

(6)

Source: KSEI, Sinarmas Investment Research

No significant movement in both foreign and local ownership as coal price experience a slight correction in September.

However, market is still expecting solid 3Q18 boosted by high coal price and better operational performance as weather

conditions improves.

BANKING SECTOR

Coal Sector

Average foreign ownership in the coal sector

_{Average local mutual fund ownership}

Average local pension fund ownership

Average foreign mutual fund ownership

45.7%45.7%45.1%45.1%45.4%46.2%46.1%45.3% 44.2%

43.0%43.2%44.1%_42.6%41.9% 40.9%_{40.0%40.5%40.3%}

38.2% 35.1%35.7%35.3%34.7%

33.4%33.8%33.5%34.0%34.3%34.6%35.0%34.0%35.0%34.7%34.7%35.5%

37.0%36.8%36.5%37.2%37.6%39.4%38.9%38.6%

0.0%

% Foreign Ownership

5.6% 5.6% 5.5% 5.5% 5.5% 5.5%5.4%

3.6% 3.5% 3.5% 3.6% 3.4%

11.1%11.1%11.6%11.8%11.8% 12.5%12.4% 11.7%12.0%12.2%

12.7%13.3%13.1%

0.0%

(7)

CONSTRUCTION SECTOR

Source: KSEI, Sinarmas Investment Research

Concerns on new contract achievement paired with potential project delays result in the gradual decline of foreign

ownership. Share price underperformance has driven valuation to even more undemanding levels though we see a lack of

catalyst in the near term.

BANKING SECTOR

Construction Sector

Average foreign ownership in the construction sector

_{Average local mutual fund ownership}

Average local pension fund ownership

Average foreign mutual fund ownership

32.5%33.4%32.1%31.8%33.4%32.5% 34.8%

36.7%37.1% 35.8%

37.4%37.8%38.5%39.0%37.6%38.7% 41.2%42.6%

39.4%39.0%

37.8%37.2%36.5%36.9%38.1%

38.9%40.3%40.2%40.0%39.7%39.8% 41.3%40.7%

39.5%40.4%40.2%_38.7%38.3% 37.7%

36.6%36.6%36.1%_35.6%

0.0%

% Foreign Ownership

7.0%

10.1%10.4%10.5%10.4%10.1%10.0%10.0%10.1%10.2%10.1% 9.8% 9.9%

9.5% 9.5%9.7% 10.1%10.3%

10.7%10.7%10.6%10.6%

25.8%_25.3%26.1%

24.6%25.1%25.0%25.2%24.9%24.9%24.8%25.3%24.3% 23.7%24.6%24.2%23.8%

21.8%

19.8%19.4%19.3%19.1%19.7%20.0% 18.3%

17.4%18.0%_{17.2%16.8%16.7%} 15.2%

9.8% 9.8%

8.9%_8.6%9.1% 8.9%9.5% 10.7%11.0%10.5%

12.1%12.2%12.2%12.2%

12.4%12.7%_{12.4%12.3%12.3%12.3%12.1%12.4%12.4%12.0%12.2%}12.7%12.7%12.9% 13.4%13.6%_13.2%13.0%

12.7%13.0%13.0%12.6% 12.3%

(8)

We see strong accumulation from local funds despite foreign capital outflow as local investors expect strong 3Q18 results

(especially SCMA) driven by stronger FMCG and Asian Games 2018.

BANKING SECTOR

Media Sector

Source: KSEI, Sinarmas Investment Research

Average foreign ownership in the media sector

_{Average local mutual fund ownership}

Average local pension fund ownership

Average foreign mutual fund ownership

30.1%

30.4%30.5% 30.2%30.4%

30.6% 31.1%

31.4% 32.0%

32.3%32.4% 33.5%

33.2%

32.4%32.4%32.3%32.5%32.4%32.4%32.6%32.5%32.5% 32.8%32.9%

33.3% 33.8%

33.2% 32.9%32.9%

32.5%32.7% 33.5%

32.8%33.0%_32.7% 32.2%

% Foreign Ownership

0.5%

2.6%_2.5%

9.4%

(9)

Strong uptick from local MF as recent B20 regulation provides a new angle to the sector. Nonetheless, with the soybean

harvest reaching all time high in Brazil and US, we see limited upside for CPO price.

BANKING SECTOR

Plantation Sector

Source: KSEI, Sinarmas Investment Research

Average foreign ownership in the plantation sector

_{Average local mutual fund ownership}

Average local pension fund ownership

Average foreign mutual fund ownership

44.3%45.2%_43.6% 41.3%42.1%42.3%41.5%

44.1% 42.9%_41.9%42.0%44.0%

45.5%44.7% 42.2%

37.1%37.0% 35.2%

33.9%33.7%34.4%34.6%34.4%34.7%35.1%34.3% 36.5%36.4%36.9%35.8%

35.0%36.0%36.5%36.2%35.9%37.0%37.0%37.2%36.6%36.4%36.4%35.5% 34.5%

% Foreign Ownership

12.6%12.9%12.5%12.6%12.6%12.9%12.8%

11.7%11.5%11.6%11.5%11.4%11.2%11.2%11.7% 12.4%12.4%12.5%

12.4% 11.1%

13.6% 16.8%

15.2% 13.4%14.2%

13.0% 12.5%_12.2%12.1%

9.9%_{9.6% 9.5%}

10.3%10.8% 11.7%

11.9% 11.4%11.4%_11.1%

12.2%12.2%

11.5%11.8%

12.4%12.7%12.9%12.3%12.3% 11.8%12.3%12.3%

12.6%12.6%12.5%13.0%13.0%12.9%13.2% 13.3%13.6%

14.1%14.0%14.1%13.9%

(10)

We see a battle between cheap valuation and lack of positive catalyst for the sector as investors are still wary on the impact

of stronger Dollar to the balance sheet and rising BI rates. In the meantime, we remain cautious on the sector while

monitoring 2H18 marketing sales performance.

BANKING SECTOR

Property Sector

Source: KSEI, Sinarmas Investment Research

Average foreign ownership in the property sector

_{Average local mutual fund ownership}

Average local pension fund ownership

Average foreign mutual fund ownership

46.9%47.3%46.3%47.3%46.9%46.6%46.6%46.9%46.3%46.4%46.3%46.9%47.9%48.1%47.8%47.7%48.8%49.4%48.9%49.3%48.7%48.8%47.5%47.9%48.3%49.1%49.8% 44.5%

42.3%42.2%41.7% 40.0%

38.8%

35.0%35.2%34.9%34.7%34.7%34.6%34.3%34.3%34.3%34.2%

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

% Foreign Ownership

2.1% 2.1% 2.1%2.2% 2.2%

2.3%2.4%2.3% 2.3%_{2.3% 2.3% 2.3%} 2.1% 2.0%

1.9% 1.8%

1.7% 1.7% 1.9%

2.1% 2.3%

2.2%2.4% 2.3% 2.4% 2.4% 2.3% 2.3% 2.3% 2.3% 2.3%2.2%

2.2%2.2% 2.2% 2.2% 2.2% 2.2% 2.3%2.3% 2.2% 2.2% 2.2%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%

7.9%8.1% 8.5% 8.5% 8.4%

8.2% 8.0% 8.0%

8.5% 8.6% 8.4% 7.8%

7.5% 7.6% 8.0%8.3%

7.3% 6.5% 6.4%

5.8% 5.9% 5.4%

6.0%_5.8% 5.2%

4.8%

4.3% 4.2%4.1% 4.3%4.4%_{4.0% 3.9%}4.4% 4.5% 4.8% 5.0%5.0% 4.9%

5.2% 4.9%

4.8% 4.7%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0%

9.4% 9.2% 8.6% 8.6% 8.6%

8.3% 8.1% 8.2%_{8.0% 8.1% 8.0%}8.2% 8.3%8.5% 8.5% 9.0%

9.9%10.3%9.8% 9.7%

9.4% 9.4% 9.6%9.8% 9.9%

10.2%10.4%10.5%10.4%10.3%10.2%10.3%10.2%

10.1%10.1% 9.9% 9.9% 10.0% 9.9% 10.0%10.0% 9.9%9.8%

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

(11)

RETAIL SECTOR

Source: KSEI, Sinarmas Investment Research

We notice a battle between foreign and local investors as Q3 earnings release is due where expectation of sales for some

retailers remain strong. However, we advise investors to remain vigilant on the impact of higher import tax rate for

consumption products and margin compression caused by IDR depreciation.

BANKING SECTOR

Retail Sector

Average foreign ownership in the retail sector

_{Average local mutual fund ownership}

Average local pension fund ownership

Average foreign mutual fund ownership

67.0% 67.7%_67.5%67.8%68.0%

68.3%_68.1% 67.3%

67.0%67.4%67.3%

65.8%66.1% 65.4% 62.8%63.2%

61.9%61.7%61.7% 62.6%_62.3%62.8%

64.7%

% Foreign Ownership

1.1%1.1% 1.1% 1.1% 1.1%

4.6%

23.9%

23.3%23.0%23.3%23.5%23.7%23.4%23.3%24.2%

24.9%25.1%25.5%25.2%25.0%25.9%26.4%26.4%27.2%

27.8%28.7%29.2%29.1%29.1%29.0%

29.4%29.3%29.6%29.9%30.0%29.9%_{29.4%29.3%28.8%28.8%}30.2%30.5%30.4% 31.0%

(12)

TELECOMMUNICATION SECTOR

Source: KSEI, Sinarmas Investment Research

We see gradual accumulation across the board as investors are expecting earnings recovery driven by tariff hike in recent

months paired with rising data traffic as tariff war subsides. To note, local newspaper cited that

TLKM’s

data payload

increased by 44% during Asian Games 2018.

BANKING SECTOR

Telecommunication Sector

Average foreign ownership in the telecommunication sector

_{Average local mutual fund ownership}

Average local pension fund ownership

Average foreign mutual fund ownership

86.0%86.1%85.9%86.5%86.5%87.0%86.8%86.7%86.3%86.0%85.8%86.9%86.6%86.6% 84.3%84.7%

85.5%

84.3%_84.0% 83.2%

% Foreign Ownership

2.3%

4.7%

22.6% 22.5%22.6%

22.7%

25.4%25.6% 24.9%25.1%

25.2% 24.7%

24.2% 23.5%23.5%

23.0% 23.5%23.7%

24.0% 24.8%

23.7%23.9% 24.1%

(13)

TOBACCO SECTOR

We see foreign funds to begin accumulating tobacco sector after sell off in the past few months. Tobacco sector is a proxy of

the

nation’s

consumption recovery and is defensive as it is protected from IDR depreciation, which has been depicted by

sales volume improvement and ASP increases.

BANKING SECTOR

Tobacco Sector

Source: KSEI, Sinarmas Investment Research

Average foreign ownership in the tobacco sector

_{Average local mutual fund ownership}

Average local pension fund ownership

Average foreign mutual fund ownership

69.1%69.3%68.6%68.0%68.0%68.2%68.5%

62.9%64.5%64.5%63.6%63.4% 61.8%62.0%63.0%64.1%

66.6%66.5%66.0%65.6%_64.5%

55.4%55.2%54.4%54.9%54.7%56.1%55.9%56.0%55.1%53.7%_{53.1%54.0%53.4%53.4%} 51.6%

49.9%_48.5%

47.0%45.9%45.5%45.7%46.0%

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

% Foreign Ownership

1.7%

1.4% 1.5% 1.4% 1.4% 1.4% 1.4% 3.1%

3.0% 3.0%3.2%3.0%3.0% 3.0%_2.9%3.0%

2.8% 2.8% 2.8% 2.8%3.0% 3.4%3.5%

3.6%_3.5%3.7%3.6% 3.6% 3.6% 3.6% 3.6% 3.6% 3.5%3.6%

3.7%3.8% 4.0% 4.0%

4.2% 4.2% 4.2% 4.2% 4.1%

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

10.5%10.8%10.5%11.2% 11.7%11.5%11.5%

16.5% 16.0%16.3%

16.9% 17.9%18.3%18.2%17.6%

16.7% 14.6%14.4%

13.1%12.8% 14.0%

15.8%15.8%15.8%_15.4%15.2% 14.4%14.2%

13.5%13.7% 14.8%

15.8%15.9%16.4%16.5% 18.3%

19.5% 20.4%

21.3%21.7%22.0%22.1%21.8%

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

13.8%13.8%13.8%14.1%14.2%14.1%13.7% 21.3%21.2%

20.6% 19.8%

21.8% 20.3%

19.8%20.3%

20.8%21.5%21.5%21.7%21.6%21.7%20.4%20.4%_20.0%20.5%20.4%20.7%

21.3%21.5%21.9%21.8%21.5%21.6%21.5%21.4%21.8% 20.6%

19.5% 18.6%

17.9%18.0%18.6%18.6%

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

(14)

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

BANKING SECTOR

(15)

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