There have been talks of setting up a scheme that encourages the establishment of Family Offices in the country. A Family Office is essentially an entity that manages the family’s wealth accumulated from its main business(es). Typically, the money is invested in financial products directly or indirectly (e.g. hedge funds, private equities). Globally, Family Offices are dominating ...
Read MoreWhat appeared to be temporary macroeconomic condition previously; now is more likely to be permanent as evident by high inflation and high interest rate. Households are saving less, but they are not necessarily spending more in terms of quantity. There is no better time than revisiting whole portfolio and reshuffling to adjust to the new environment. Risk ...
Read MoreSome Companies hold cash reserves higher than their market caps. Some of these Stocks are rarely heard of. Why is this the case? No Dividends. Most of these Companies do not pay dividends. If any, very little compared to their accumulated profits. Low Stock Liquidity. Without liquidity, there is limited number of Investors willing to invest in. In ...
Read MoreInvesting in the Stock Market is not a rocket science. Yet, achieving success is not as simple as using rigid rules / guidelines. Some of these commonly believed guidelines do not always hold true. 1. Stocks with PBV less than 1(one) will eventually climb back up. Not necessary, for several reasons: The intangible asset (e.g. goodwill) is ...
Read MoreYear 2024 started with high hopes on economic recovery. Inflation seemed to be contained, and rate cuts were on horizon. Months later, the hope is fading away. Now, there is more pessimism than optimism. Inflation Risk Strong jobs data, coupled with geopolitical risk, are keeping the inflation at top range target of 2,5+1% (i.e. 3,05% YoY in March ...
Read MoreIn a slow economy, Investors tend to put their money more into fixed income assets such as deposits or fixed-interest bonds. Yet, putting all eggs into one or two baskets come with their own risks. Low-risk deposits do not mean risk-free. Which is why for some Investors, diversification by maintaining their position in the Stock Market ...
Read MoreMonths ago, it was unthinkable that the interest rates would stop increasing, or at least left as is. That’s not the case anymore. Wishful thinking for lower rates might come true this year. Inflation Rate Despite increasing food inflation, overall inflation is consistently coming down. At 2,6% YoY, inflation is at its lowest point for the past ...
Read MoreIn the early 2023, many believed that the year would become a cornerstone for better life and economy. Some made it as they thought it would be for them. For some (maybe majority), not so good as they expected. Hedging against Inflation Against backdrops in the debt and stock market, more Investors pour into assets that hold ...
Read MoreThe economy is doing fine, but not great. The future looks alright, but not bright. Although the inflation (except food) is under control, the GDP growth dips slightly under 5%, a rare occurrence except during pandemic. source: bps.go.id Softening Commodity Prices Mineral (coal, metals, etc) exports accounted for 20% of total exports for the first 10 months this ...
Read MoreThis year marks a record for IPO listing in the market, despite sluggish macroeconomic and geopolitical tension. A record breaking of 77 IPOs so far this year, with over IDR 50 trillion raised. Good for businesses, especially small to mid sizes, that acquire funding via these IPOs. No need to pay interest to the banks since ...
Read MoreThere is general belief that economic growth means improved welfare, as long as the inflation is under control. The latest inflation data shows a decline overall, which is encouraging. Source: bps.go.id As for food (soft commodities), the inflation figure does not differ much, i.e. at 2,51% YoY. Food is a necessity, no argue about that. Good GDP, account ...
Read MoreDemographics play an important role in the economic growth. Any demographic change can affect GDP, living standards, infrastructure investments, social welfare, etc. Population Growth It is commonly understood that the higher the population growth, the better the economy will be. Some countries experiencing low birth rate are introducing more family-friendly schemes and accepting more skilled immigrants. Age Structure There ...
Read MoreThe Stock Market can be very unforgiving for some Investors without knowledge and experience. Still, knowledge and experience do not guarantee success when investing in the Stock Market. A bit of luck may help, but not in the long run. Zero Sum Game Defined as when an Investor profits from a stock, there is another Investor that lose ...
Read MoreIn a period where many analysts expect the economy turns sour, there is a glimpse of hope for some assets. Against all odds, these assets are surprisingly resilient in their valuation so far. Property Prices Property price is one main contributor to inflation. Higher interest rates were meant to hold price from escalating further. Nonetheless, the residential property prices ...
Read MoreA common understanding is that in a bearish stock market, always revert to the fundamentals. Fundamental analysis can identify whether a company stock is cheap enough to accumulate. If only it is that simple, however. What can go wrong with fundamental analysis? 1. Selling pressure Most stocks are in the red compared to last year. There’s no sign of ...
Read MoreAs the energy flow (supply chain) normalizes towards pre-pandemic level, the energy prices are falling back. This should be good news, especially when it comes to controlling inflation and avoiding recession. However, there are some reasons to be cautious. 1. Energy transition Renewable (green) energy is the future, for sure. The question is, how to get there. Fossil-fuel energy ...
Read MoreDiversification is often mistaken as spreading into as much investment assets as possible, as evenly as possible. Here are common mistakes made. 1. Diversification without a strategy and purpose Having a strategy and purpose enhances quality of diversification. For instance, some assets are meant to generate cash flow which will provide steady income during recessions. As for other riskier ...
Read MoreRecords are meant to be broken. Year 2022 was the culmination of financial and commodities sectors. Record profits, revenues, margins, etc. The financial reporting season nearly concludes with some remarkable results. Commodities Coal prices tripled, fuel price doubled, nickel price spiked, ammonia price breached level not seen before, etc. ADRO recorded nearly USD 3 billion in profits, with cash ...
Read MoreThe market has been lackluster so far in 2023. It applies to most assets, including the stock market. Wait and See This is a common strategy that most Investors deploy for now. It’s not due to liquidity crunch. Not because there are not enough quality assets. It’s about securing those assets at lowest possible price. It is a ...
Read MoreInvesting in Start-Ups is a risky move, yet if successful it pays off handsomely. Often, a Start-Up seeks initial funding from VCs before going public through IPO. It is generally understood that 9 out of 10 Start-Ups fail for various reasons. This happens to even most advanced economies. Source: DemandSage Source: Failory Why VC’s (Venture Capitals) Early phase growth of ...
Read MoreYear 2022 commenced with high expectation in the equity market. The pandemic was about to subside, demand was about to rebound. Midway through 2022, the expectation turned sour, due to inflation and geopolitical situation. AUM and Investor Growth More Investors joined the Mutual Funds, jumping by 40% within a year. Source: KSEI Despite the encouraging growth in Investor number, unfortunately ...
Read MoreOpportunity cost occurs in almost every facet of life. It is inevitable. In investment domain, opting for an investment asset (A) over another asset (B) means not getting any money from that other asset (B). It is a missed opportunity. Quantifying the Opportunity Cost (OC) Opportunity Cost is not the same for every single Investor, depending on their ...
Read MoreA Valley and a Canyon have similarity in the sense that both are declines of landscape. The difference? One (Canyon) is steeper and deeper than the other one (Valley). Almost everyone agrees that the market is in the state of decline. The question is how deep it will be. Window Dressing December has been recognized as the time ...
Read MoreGlobal stock market has been in bearish mode for months. There is little sign of recovery. Despite the downturn, there is some comfort in Dividend Stocks. So why are they so appealing amid recession fear? 1. Proven business model The strength of a company’s business model is tested through crisis. Some of these Companies have existed for decades ...
Read MoreCompared to other emerging economies’ currencies, the IDR has not weakened as much against the USD. source: Nikkei Asia On the bright side, a weakening local currency tends to improve profitability of Exporters. So, which exporting Companies might be the beneficiaries? Take WOOD for instance. Foreign exchange gain alone pushed up its profits by IDR 34 billion in ...
Read MoreValuation of Tech Companies has been largely decimated by the fear of recession and inflation. Some are even down by 80% from their peaks. Most of these Companies were once valued at PER & PBV of thousands (compare to conventional valuation PER of 10 and PBV of 1). Now, the reality sets in. Funding is no ...
Read MoreInflationary pressure impacts on nearly everything. Property is no exception. 1. Construction Cost Construction cost varies among cities / towns. It is felt most in the capital province (DKI Jakarta), where the cost is the third highest in the country. source: bps.go.id Doubling of steel price between 2020 to early 2022 (in addition to other materials cost such ...
Read More“Know your investment assets. Know how much it is worth, then sell at that price.” Quite often we heard of these words. There is nothing wrong if one chooses to follow this principle. Premium branded items are rarely discounted for sale, anyway. Nevertheless, there are some Investors who choose different path, i.e. settling for less. Why would ...
Read MoreSky is the limit for some Miners. Some publicly listed Companies have been increasing its presence overseas. DSSA (Dian Swastatika Sentosa) It acquired Stanmore Coal (ASX:SMR) back in 2020. In turn, SMR is about to complete its full acquisition of SMC / BMC, a tier 1 asset from mining powerhouse BHP & Mitsui. In H1 FY22 alone, SMR ...
Read MorePost 1997-1998 Asian financial crisis, the country has solidified its position as a rising economy. Even during the 2008-2009 global downturn, it still managed to keep its GDP growth quite stably. Source: Worldbank One reason could be due to the strength of its banking system. Compared to other countries, interest rate spread (2021) between lending rate and ...
Read MoreThe topic of FIRE (Financially Independent, Retire Early) is increasingly being discussed among the younger generations. Let’s probe several common questions here. What does it mean to be financially independent? Some say it means not having to work anymore to live comfortably. It can be either due to vast wealth accumulated; or due to passive income. Why would someone choose ...
Read MoreInflation. Is it a big deal? Definitely. Previous article has covered a bit of this issue. https://equityindonesia.com/walking-on-thin-ice/ Other issues that could arise from high inflation: Cost of Debt Interests on debts taken by individuals and corporations might accelerate up, leaving some unable to service their debt. This is where DSCR (Debt Service Coverage Ratio) becomes very critical for Companies. DSCR > 2.5 ...
Read MoreFundamental analysis on stocks can be tedious sometimes. Depending on Investors’ eagerness, the analysis can be carried out as extensive as it can be. Quite often however, Investors race against time to make swift decisions in volatile market. Some quick ways to analyze in such situation. Peer Comparison One could easily tell whether a stock is valued more or ...
Read MoreIn the ideal stock market world, stock price and value should balance out. For savvy Investors, the time spent on research etc. is meant to look for this imbalance. It can be a challenging task, especially when the IHSG index reached all-time high recently. Well, the Q1 2022 reports have exposed some of these stocks. There is no certainty ...
Read MoreYear 2021 could be remembered as the benchmark for economic recovery. The country has emerged strongly from the tip of recession into enviable growth of 3.69%. The IHSG index has reached all time high as of April 2022; thanks to increasing number of investors, companies’ performance, and foreign investment inflows. Several top performing Companies in 2021: ABM Investama ...
Read MoreLast time the Commodities enter super cycle season was in 2008. Both Soft Commodities (e.g. wheat, corn) and Hard Commodities (e.g. coal, oil) were heating up mainly due to increasing demands from the emerging economies (BRIC, etc). This time around, the super cycle is rather different. The pandemic and the geopolitical situation have all contributed to ...
Read MoreFinally, the most anticipated blockbuster IPO is coming to realization. Yet, the timing of GoTo IPO couldn’t be more challenging. Some global tech stocks’ prices have plummeted from their peaks recently (e.g. Grab, Sea Group, Bukalapak). There are several reasons for optimism, however. Market Leader Winner takes all, as the saying goes. GoTo is the market leader in the ...
Read MoreInvesting in Crypto seems to be risky at first. Much more volatile than the stock market or other investments. Double digit loss / gain within hours is possible. Looking into the Bitcoin (BTC) volatility against S&P500 VIX for the last few years. Then why are some Investors, including Fund Managers, compelled to invest in it? Many reasons, ...
Read MoreInvesting in the stock market can be thrilling for certain Investors. Sometimes, these Investors push it a bit too far to the limit. No difference to walking on thin ice. Buy at high price Nothing’s wrong with buying a stock at high price (high PBV PER etc). After all, there is a reason for the market to value that ...
Read MoreTiming is fundamental in the investment world. To gain is to understand when it is the right time to make a move. Time to invest, time to sell Most Investors know well when to invest in an asset, i.e. purchase a stock (or property / other assets). Yet, it is just as crucial to know when ...
Read MoreIs it possible to build a portfolio of assets that allow Investors to sleep well throughout the nights, amid volatility? Certainly, although it might means missing some intermittent opportunities. Diversification As boring as it sounds: diversification, diversification, and diversification; rule no 1 is always about getting the right mix of assets into the portfolio. Ideally, an asset ...
Read MoreYear 2022 marks the third year of pandemic. While it is conceivable that the global economy was adversely impacted; it is also remarkable how resilient most economies (including Indonesia) have been so far. Henceforth, what can Investors expect in 2022? Will the tiger roam? Commodities The country has enviable natural resources needed as raw materials for electronics, high-end ...
Read MoreReporting season Q3 2021 has produced some surprising results. Several stocks have been performing very well with record revenue and profits. Manufacturing sector (e.g. INKP) has once again shown resilience surfing through the pandemic. Those with diversified assets (e.g. SRTG and HRUM) might strongly overperform in the future. Disclaimer: NOT FINANCIAL / INVESTMENT ADVICE. This article is ...
Read MoreThe Mitratel (MTEL) IPO is about to set a new record for capital raising this year. Will it be able to compete against other tower behemoths like TOWR or TBIG? Financial performances between these 3 major tower companies do not vary much in nominal figures. MTEL, however, has more opportunity for growth due to the IDR 20–25 ...
Read MoreHousehold wealth, especially in Asian countries, are very much tied to property assets. If there is such a strong connection between wealth and property, how has the property value performed in Indonesia? Property Prices Even prior to the pandemic, the property prices in the last 5 years have been subdued in real terms. The growth in property prices ...
Read MoreFor some Investors with short term view on stock trading, Technical Analysis (TA) is commonly used as a tool to identify opportunity to enter and to exit. This methodology studies historical market data to predict future movement of stock prices. Nevertheless, there are pitfalls of relying on technical analysis to invest in stocks. 1. Overanalyze Similar to some academic ...
Read MoreFailing to plan ultimately means planning to fail. While it is true that investment outcome can be very unpredictable, planning is still better than none. Tomorrow belongs to Investors who prepare for it today. Consider these WARM principles. When to Enter and When to Exit Is it possible to make good investment return on bad stocks? Absolutely! Investing in ...
Read MoreThe State Budget Draft (RAPBN) 2022 is about to be finalized. So what does it has anything to do with the stock market? Perhaps one direct effect in the future, should this budget be approved, is on the Construction & Infrastructure sector. Since the pandemic, the stock index has been underperforming. In the RAPBN 2022, the budget ...
Read MoreH1 reporting season produces several winners so far. In the period of pandemic, some businesses have shown resilience and remarkably grow their profits by double digits or more. It is comforting to see that these companies come from various industries, e.g. manufacturing, mining, finance, technology etc. This could be an indicator for better things to come. Some ...
Read MoreObviously, there some hypes surrounding the expected Bukalapak (BUKA) IPO in August 2021. Yet, there are some questions remain. Are the early Investors seeking to exit this start-up business? Is the business still growing at sustainable rate? When will it stop burning cash? Is the IPO price fairly valued? Possibility of Early Investors Exiting Elang Mahkota Teknologi (EMTK), through its subsidiary ...
Read MoreGrowth. It is often not found in Blue Chip stocks that have reached maturity level in its business. Neither it is found in Small Cap stocks that lack in capital and are unable to secure loans. Mid Cap stocks can offer the growth potential at double digit. They are the ones that have proven business model, ...
Read MoreFirst half (H1) 2021 has been rather timid movements for IHSG. While several global indices advanced as high as above 10%, the IHSG dropped by 2%. The next 6 months (H2) could be the moment to catch up with these global indices, due to the following catalyst: Anticipated blockbuster IPO of GoTo (Gojek Tokopedia). Acceleration of vaccination rates, ...
Read MoreKeeping cash in portfolio at certain amount can be considered a waste for some. Yet for others, it can be part of investment strategy that can deliver premium returns. Consider how much cash that many investment companies hold at the moment. Even Berkshire Hathaway is sitting on $145 billion of cash stockpile as of March 2021. ...
Read MoreHow joyful would it be to spend what is earned from the investment? Going for holidays, upgrading cars, shopping spree, etc. After all, once in a while being spoilt is necessary. There is nothing wrong with spending the earnings. On the other side, it does make a huge difference if an Investor choose not to spend what ...
Read MoreWhat is the likelihood that Mutual Funds (Reksadana) consistently (over 5-10 year period) deliver over 20% average return a year? Extremely unlikely. A Mutual Fund (Reksdana) that manage its risk properly will usually allocate the fund over diverse range of portfolio. Regardless of high gain in one asset (e.g. shares), overall return will average down due ...
Read MoreShare market downturns (declines) are inevitable. Free market will always have ups and downs. Sometimes downturns can be prolonged for 1-3 years. However, most of the times they happen within short periods (few days or weeks) due to market sentiments or correction from overshoots. As such, several strategies can be deployed: 1. Hedging Hedging position does not have to ...
Read MoreInvesting is not always a clear-cut decision. Generally speaking, Investors tend to rely on their economic sense rather than just mathematical or technical estimation. Economic sense simply means careful and efficient use of resources. Economic sense covers the elements of: 1. Cash Flow The saying that “cash is king” should be truly engrained in the mindset. At the end of ...
Read MoreNot many people are aware that Indonesia was somehow related to the first introduction of Share Market. VOC (a Dutch Company) was the first company that issued Company Shares to the public in order to finance its trading venture across the globe (including Indonesia which became its headquarter) in year 1600. (note: resentment towards Dutch colonization ...
Read MoreSRTG (Saratoga Investama Sedaya) was set up as an investment vehicle that owns majority shares of some blue chip companies in Indonesia. These blue chip companies include: CodeCompanySRTG’s Attributable Shares ** (per 30 Dec 2020)ADROAdaro EnergyIDR 7.2 trillionMDKAMerdeka Copper GoldIDR 6.7 trillionMPMXMitra Pinasthika MustikaIDR 1.4 trillionTBIGTower Bersama InfrastructureIDR 10.7 trillionTotalIDR 26 trillion **estimate only Approximately 26 trillion worth of ...
Read MorePSAB and MDKA PSAB (J Resources Asia Pasifik) is a gold mining company comparable to another gold peer MDKA (Merdeka Copper Gold). It currently produces 171,000 ounce of gold per annum. While MDKA share is shooting up over recent months due to higher gold prices, PSAB share has not increased as much. Looking into their latest Q3 financial ...
Read MoreBuying and Selling Properties in Indonesia will incur additional costs in the form of taxes and other fees. Buyers For Buyers, these taxes and fees include: NoCostsEstimationE.g. for a IDR 500 million property1BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan)5% of purchase price after deducting the NPOPTKPIDR 22,500,0002Title Transfer Fee (Biaya Balik Nama)2% of purchase priceIDR 10,000,0003Sale and ...
Read MoreElectric Vehicles (EV) As the younger (future) generation becomes more environmentally minded, there is ever increasing demand for electric vehicles (EV). Although globally there are dozens of electric vehicle (EV) manufacturers, the largest one (Tesla) has higher market capitalization than most established vehicle manufacturers. As a matter of fact, Tesla is currently valued (USD 578 billion) as much ...
Read MoreThe Stock Market is about to encounter with potentially the largest corporate action this year, i.e. ADRO spinning off its coal business (AAI). The main idea is for the Company to focus on greener projects and to improve access to funding. As well, better allocation of capital that gives better ROI. This move was similarly implemented ...
Read MoreResidential Properties are losing its appeal as investment assets. Today, a Property is seen merely as an asset used to hedge against inflation, just like gold and foreign currency. In the latest Residential Property Price Survey (Q2 2024) issued by the Central Bank, the Residential Property Price Index (IHPR) slowed down to 1,76% (YoY), and the ...
Read MoreThe market is swamped with nickel supply. The price has dropped by nearly half since the start of 2023, although it rebounds little bit lately. source: trading economics.com How do we even get here in the first place? New Projects In 2021, the country already has 37% share of nickel mine production globally. By 2027 the market share will ...
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