Key takeaways:
• Downside risks for global economy and market : 1) higher inflation and aggressive tightening; 2) heightened geopolitical tension; 3) Covid-19
• Albeit the risks, Indonesia’s economy has shown to be resilient on the back of solid macro data : 1) mobility; 2) CCI & PMI; 3) liquidity; 4) international trade and 5) currency as well as sovereign risk
• Risk for domestic economy is potential higher inflation due to : 1) soaring commodity prices such as cooking oil; 2) rising cigarette prices as well as 3) VAT hikes from 10 to 11%
• Maintain outlook with several adjustment on inflation, risk free and interest rate forecast FY22F.
• Domestic equity outlook remains positive on the back of 1) solid macro data; 2) foreign flows 3) potential benefit from geographical rebalancing due to escalating geopolitical tension with JCI target for FY22F at 7,650 (+20% EPS growth implying 15.4x FY22F P/E)
• We take out BBNI IJ, EXCL IJ, TLKM IJ, TOWR IJ from our top picks and add DSNG IJ, MAPI IJ as well as UNTR IJ
Disclaimer On
