Jakarta. Property and construction
companies are leading Indonesian stock market gains so far this year, as
investors expect good earnings on the back of steady property demand and
acceleration of government-initiated infrastructure projects.
The sector — which groups 54
construction companies and property developers — has gained 11.2 percent so
far, while the Jakarta Composite Index has gained 4.5 percent.
Reza Priyambada, head of research at Trust Securities, said the sector is regaining momentum after property companies were hit by concerns over slowing sales as the central bank increased interest rates and tightened mortgage regulations.
Over the second half of last
year, Bank Indonesia increased the key interest rate by 175 basis points to 7.5
percent. It also tightened mortgage rules by imposing a minimum down payment of
40 percent on a loan applicant’s second home and 50 percent on a third home.
The central bank’s new
regulation was implemented in September last year, after which the sector saw a
16 percent loss in November and December.
Reza said the rebound was
triggered by various reports saying property developers are still expecting to
report positive earnings for 2013.
“The property sector seems to
be able to maintain sales so far. Companies like Bumi Serpong Damai still
expect to report some growth in earnings in 2013,” he said.
Bumi Serpong Damai (BSD), the
biggest property unit of Sinar Mas Land, is yet to announce its full year
earnings.
A report by Investor Daily
last month said BSD estimates a 78 percent growth in net income last year to Rp
2.3 trillion ($188.6 million). Meanwhile, BSD’s revenue is estimated at Rp 5.5
trillion, an increase of 48 percent from a year earlier.
Sinar Mas Land is a
Singapore-listed property holding company controlled by one of Indonesia’s
largest conglomerates, Sinar Mas Group.
Summarecon Agung, another
developer, expects to see a net income of Rp 1 trillion to Rp 1.2 trillion in
2013, up from Rp 800 billion a year earlier, according to a statement by Summarecon’s
president director Johanes Mardjuki last month.
BSD has seen its shares rise
19.4 percent while Summarecon rose 21 percent.
Reza said investors are
responding positively to central bank’s ruling to maintain its rate at 7.5
percent in January, avoiding further increases in borrowing costs.
Meanwhile, state-owned
builders like Waskita Karya and Wijaya Karya are also boosting the sector.
“Construction companies are
announcing various new projects, which investors expect will help their
earnings,” Reza explained.
These construction companies
are benefitting from government infrastructure projects, which triggered
Waskita Karya’s shares to rise 49.4 percent on Friday, while Wijaya Karya grew
28.5 percent.
Another industry posting solid
growth on the Indonesia Stock Exchange (IDX) is the financial sector with a 9.3
percent gain so far this year. Banking stocks are still the backbone of this
sector.
Bank Rakyat Indonesia, the
second largest bank by assets, rose 20.3 percent so far this year to Rp 8,750, rallying
after it reported 14 percent growth in net profit for 2013. Other banks are
expected to follow the trend.
Bank Mandiri, Indonesia’s
largest bank in terms of assets, loans and deposits, has gained 18 percent to
Rp 8,775. The state-owned bank is scheduled to report its earnings on Monday.
Meanwhile, the mining and
agribusiness sectors are still declining on the back of persistently weak
commodity prices such as for coal and crude palm oil.
No comments:
Post a Comment