Indonesian Banks, Possible tightening, CLSA

Bank Indonesia is considering increasing the reserve requirement (RR)
for Indo banks in response to high inflationary pressure from the planned
fuel price hike. This is an Indonesian-specific issue as other countries in
the region are easing instead of tightening. We estimate minimal impact
from a 100 bps increase in RR for banks under CLSA coverage due to the
current excess liquidity and low yield from FASBI. Moreover, the system’s
liquidity is still abundant. We maintain our BUY call on BBRI and BBNI.

Astra International , Right place, wrong time, Macquarie

Event

·         We downgrade our recommendation to Neutral from Outperform; cut our FY12–13E estimates by 6.7%; and reduce our PT to Rp76k from Rp80k (representing a 15x FY13E PER). Our downgrade reflects several factors which collectively have made us sufficiently uncomfortable with the stock’s short term risk/reward profile to downgrade. We nevertheless remain positive on the long term story, and would look to re-accumulate in the low 60ks.

·         These factors include the likely material impact of BI down payment (DP) limitations on 2W volumes; the market share risk posed by Nissan’s upcoming NV200 launch; our existing expectations (now exacerbated) for ASII’s FY12E earnings growth to slow; and ASII’s relatively full short/medium term multiples.

Impact

·         20% down payment limitations looking increasingly likely: