Jakarta, CNBC Indonesia – The swift inflow of foreign funds has undeniably made the Jakarta Composite Index (JCI) soar throughout 2022.
On a year-to-date (ytd) basis, foreigners recorded a net buy in the stock market of Rp 34.83 trillion. Along with the inflow of foreign funds, the JCI successfully rose 8.61% and penetrated the 7,148 level and became the highest level in the history (ATH) of the JCI.
However, if traced carefully, the entry of foreign funds is spent more on stocks with large market capitalization (big cap) such as banks and commodity stocks.
The two stocks that were most hunted by foreigners throughout 2022 were PT Bank Rakyat Indonesia Tbk (BBRI) and PT Telkom Indonesia (Persero) Tbk (TLKM) with net buys of Rp 8.3 trillion and Rp 6.8 trillion, respectively.
The two big cap stocks rose 14.36% and 11.88% year-to-date. The shares of PT Bank Negara Indonesia Tbk (BBNI) and PT Bank Central Asia Tbk (BBCA) were also collected by foreigners with a net buy of more than Rp 4 trillion.
BBCA shares rose 8.22% while BBNI shares rose 24.07%. BBNI shares led the strengthening of big cap banking in terms of returns. Meanwhile, the shares of PT Bank Mandiri Tbk (BMRI) were also bought by foreigners worth Rp. 1.8 trillion and rose 11.39%.
Then other big cap stocks that are also being targeted by foreigners are PT Astra International Tbk (ASII) and PT Elang Mahkota Teknologi Tbk (EMTK) shares, both of which were bought by foreigners since the beginning of the year with a net buy of Rp 2.8 trillion and Rp 2.4 trillion. . ASII shares rose 21.05% and EMTK shares rose 19.3%.
However, in terms of returns, stocks in the commodity sector tend to lead the gains. Since the beginning of the year, the shares of PT Adaro Energy Indonesia Tbk (ADRO) and PT Merdeka Copper Gold Tbk (MDKA) have become the two mining and commodity issuers that have bought the most by foreigners with net buys of Rp 1.8 trillion and Rp 1.1 trillion. These two commodity sector stocks rose 33% and 28% in line with rising global energy and metal commodity prices.
This is in line with the views of global investors. According to Desmond Loh, a portfolio manager at JPMorgan Asset Management, the sector that is attractive to the Indonesian stock market is the banking sector, because he considers that Indonesians still tend to have minimal literacy in banking products.
“In Indonesia, we are structurally positive about banking because the majority of the population is still unbanked or underbanked. We are currently positioned in the leading private sector as well as state-owned banks as they have been proactively driving digital adoption to accelerate financial penetration,” said Loh. CNBC International.
Unbanked is a term in which individuals who are of age or productive, but do not have a bank account. These individuals prefer to use transactions in the form of cash.
Whereas underbanked is a group of individuals who already have a bank account but still cannot access financial products such as credit cards, KTA, and others.
In addition to being positive in the banking sector, the commodity sector is also able to encourage the attractiveness of foreign investors to pursue the Indonesian stock market, because the increase in commodity prices due to the commodity supercycle and high geopolitical tensions are benefits for Indonesia.
The commodities are coal, nickel, and palm oil (crude palm oil/CPO).
“Strong commodity prices are also beneficial for Indonesia’s export earnings as well as the country’s trade balance, and it is set to support the Indonesian rupiah and Indonesia’s short-term growth prospects,” Loh said.
Global commodity prices are likened to a ‘roller coaster’, because since the war in Ukraine broke out, the prices of several commodities such as crude oil, wheat, and corn have also increased quite high, due to an increase in demand.
The following is a recap of the net flow, price performance and valuation of big cap stocks that are being hunted by foreigners this year.
|
Share |
Net Buy |
Change (YTD) |
PER |
PBV |
|
BBRI |
8.3 |
14.36% |
22.93 |
2.47 |
|
TLKM |
6.8 |
11.88% |
17.79 |
4.28 |
|
BBNI |
4.9 |
24.07% |
14.33 |
1.26 |
|
BBCA |
4.1 |
8.22% |
30.99 |
4.8 |
|
ARTO |
3.3 |
-16.88% |
2142.29 |
22.34 |
|
ASII |
2.8 |
21.05% |
13.83 |
1.62 |
|
EMTK |
2.4 |
19.30% |
575 |
7.8 |
|
BMRI |
1.8 |
11.39% |
13.03 |
1.78 |
|
ADRO |
1.8 |
33.33% |
7.21 |
1.63 |
|
MDKA |
1.1 |
28.02% |
221.19 |
10.59 |
It was recorded that there were 4 stocks with a ratio of equity compared to share price (PBV) below 2 times, of which 2 were Big Cap banking stocks. The shares are BBNI and BMRI. Meanwhile, 2 other issuers with PBV below 2 times are ASII and ADRO.
Meanwhile, in terms of the ratio of net profit to price, the cheapest foreign collection shares fell to ADRO. This is reasonable considering that the net profit of mining stocks, especially coal, is skyrocketing amid rising commodity prices due to the commodity supercycle.
CNBC INDONESIA RESEARCH TEAM
(trp)
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