Revenues of Indonesian Issuers Predicted to Remain OK Even though Overshadowed by the US Recession

Armfalcon.com, JAKARTA — Revenue momentum (earnings) Indonesian issuers are considered to remain positive in the first quarter of 2023 supported by improvements in economic activity. It is projected to continue until the end of this year.

PT Manulife Asset Management Indonesia Senior Portfolio Manager Equity Samuel Kesuna, CFA, said that early indications showed that consumption during this year’s Eid was quite positive. Retail sales survey estimated growth of seven percent on a monthly basis (month on month/ mom) or one percent on an annual basis (year on year/yoy) in April.

“Resilient economic growth will be a catalyst for growth earnings issuer this year,” Samuel said through an official statement received RepublikaThursday (18/5/2023).

MAMI predicts growth earnings six percent for the year. That figure, continued Samuel, does not look fantastic. “However, if the commodity sector is ruled out in the calculations, there are still many other sectors that can record growth earnings more than 10 percent this year,” he said.

Samuel explained that the stability of domestic conditions is the foundation to support investor confidence in the Indonesian stock market. From this point of view, he sees the Indonesian market as having great potential supported by factors such as stable economic growth, declining inflation and a stable rupiah exchange rate.

From a global perspective, one of the factors of uncertainty has reduced, in which the United States Central Bank (The Fed), is estimated to have reached its peak interest rate so that it can support investor sentiment. The potential for a catalyst for the market is if there is an indication that the Fed is starting to consider cutting interest rates or if there is an indication that the economic slowdown in the US is more limited than market expectations.

Another factor that investors can consider is the attractive current valuation level of the Indonesian stock market. Price earning ratio (PE ratio) JCI is currently in the range of 13x which is still below the average of 15x thus offering an attractive entry point for investors.