Market

In early December 2022, we published an article titled ‘Consistently undervalued Indofood’ when the stock (INDF) was traded at Rp6,675 to make a market capitalisation of Rp58.6 trillion. That time, Indofood was only one-third the value of GOTO Gojek Tokopedia. On Tuesday (Nov 5), INDF gained 5.7% to Rp7,875 to make a market cap of Rp69 trillion, but still undervalued. 

Food and beverage company Cimory (CMRY) is among the best performing stocks in the past 12 months with 56% gain. On Tuesday (Nov 5), the stock ended higher by 0.9% to Rp5,500, reflecting market capitalisation of Rp44.04 trillion, seven times equity. 

Composite index of Indonesia Stock Exchange (IDX) slipped 0.22% in the morning session today as the country’s GDP growing only 4.95% year-on-year in the third quarter. The economy expanded 5.03% year-on-year in the first nine months of 2024 on lacklustre household consumption, investment, and export. 

It has long been anticipated that board of commissioners of state-owned companies will mostly be replaced by people in the inner circle of the new ruling elite. In fact, some people close to Prabowo were appointed commissioners even months before he was sworn in president. But, we’re worried on growing list of political appointees in the board of directors. 

The closing down of super/hypermarket has affirmed the tight competition among retailers and the shifting of behaviour of the customers who have become more comfortable by shopping online and smaller convenience store formats. However, the Indonesian retail industry continues to attract investors.

Analysts from brokerage firms have repeatedly missed their ‘target price’ for Avia Avian, one of the largest players in the paint and coating market. A stock buyback program has been implemented since first quarter of the year, but the stock ended lower instead. Prabowo’s 3 million housing per annum program also failed to lift the stock.

Shares of Chandra Asri (TPIA), the largest petrochemical company in Indonesia, ended further down by 2.3% to Rp8,550 on Friday (Nov 1). Given the circumstances, including poor financial performance in the past few quarters, the stock needs further correction to reflect its true value. 

Shares of Alfamart (AMRT) ended lower by 2.4% to Rp3,240 on Friday (Nov 1). At the last quoted price, Alfamart was worth Rp134.54 trillion, around eight times equity (as at Sept 30), making it one of the most expensive stocks in the market. 

Shares of cement manufacturers listed on the Indonesia Stock Exchange (IDX) yet to return to their recent peak despite months of statements from Prabowo’s inner circle, particularly his brother Hashim Djojohadikusumo (once one of the largest cement players), about the ambitious housing project.

Prabowo started out his administration with bad news. The Constitutional Court torpedoed 21 articles of the omnibus 2023 Jobs Creation Law on issues related to manpower/labour. The ruling, regardless of its content, only solidified perception among global investors about the country’s lack of legal certainty.