economic outlook 2011_deserve premium

8/8/2019 Economic Outlook 2011_deserve Premium

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I n n i 2 1 1

Econ om ic Ou t look

11Samuel Sekuritas Indonesia


2/21

Capital inflows to emerging markets

Currencies undervalued Trade protectionism

Asset price inflation (bubble) in emerging

mar e sOR

e-ra ng asse pr ces Imbalance asset returns between emerging and



3/21

Emerging markets:

(US$billion) 2009 2010(ytd)

% ytd

s a merg ng ar e s:ChinaIndia

2,399283.50

2,648295.4

10.44.2

. . .

Brazil

Mexico

239.05

90.93

285.90

110.65

19.6

21.7

Source: Bloomberg



4/21

The foreign ownership position in

SBI 6.13 7.87

SUN 19.8 21.24

Stocks 3.1 3.5

. .

as % of Foreign 36.0 35.2Exchange Reserve

Source: BI



5/21

* *

The highest contributors in Asia:

China 9.1 10.5 10.5 9.6n a

Indonesia.

4.5.

6.4.

6.0.

6.2

Some other emerging economy:BrazilRussia

-0.2-7.9

7.14.3

7.54.0

4.14.3

Some developed economy:European Community

Japan

-4,1

-5.2

1.0

2.4

1.7

2.6

1.5

2.3USA -2.6 3.3 2.7 2.2

World Economy1 -0.6 4.6 4.8 4.2

5

- -



6/21


7/21

Recover of lobal econom is mostl driven b Asian Emer in

Economies: China & India - contributes about 36% of theWorld Population

nergy an commo y pr ces may con nue o ncrease The real demand may come from China and India; It may become speculative if this is the way to avoid weak US

The impact of US$600bn of QE2: Supporting low interest rate until 2Q11 a n a n ore gn n ows o emerg ng mar e s s nce on y a

few global investment choices

,unstable US economic recovery The current political situation in US may become another

important consideration



8/21

Manageable inflation

Healthy budget trong omestic mar et

Rapid wealth increase

Demographic proportion with strong support frommiddle-upper class

Re-rating to investment grade as early as January

2011 Abundant natural resources commodities gain

Political stability



9/21

Source: BPS

99Samuel Sekuritas Indonesia 9


10/21

8985

6000

7000

80

90

100

5761

67

4000

5000

60

70

32333539

292000

3000

30

40

0

1000

* *0

10

20

PDB Outstanding Utang Rasio Utang thd PDBGDP Debt Debt to GDP

10



11/21

Indonesian wealth:

Total wealth of Indonesian in 1H10reached US$1.8 trillion or 5 times higher in

the decade; In average about US$12,112 per adult or

increased by 384% compared to the year 2000

range from US$10,000 to US$100,000;

lower than US$10,000;

90% of the wealth is mainl in ro ert non financial assets



12/21

Indonesia dependency ratio

,*

120

140

10

12

Dependecy ratio (LHS)

Labor force participation (LHS)

Unempolyment rate (RHS)

%

80

1008

40

60

4

0

20

0

2

- - - - - - - - - - -

Notes: Dependecy ratio is the ratio of productive age (15+) to non prouctive age (< 15)

Dependecy ratio * is the ratio of wage earners to dependent (including age below 15)

12

Samuel Sekuritas Indonesia


13/21

Rp.million %

Higher GDP/capita support householdsconsumption

Household Consumption Government ConsumptionShare to Total (%)

Household Consumption dominates GDP(average of 64% from 2000-2009)

20

25

30

5

6

7

GDP/cap growth (RHS)

GDP growth (RHS)

80

100

120GDP at current price

5

10

15

1

2

3

20

40

60

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 q1-2010 q2-2010

0

Source: BPS

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1H-

2010



14/21

Driven mostly (still) by domestic consumption

Exports will improve as global trade is recovering, butmpor s may ou grow expor s

Physical investment may start to be realized with improvingglobal liquidity

Short-term foreign funds will keep on coming, at leastuntil 2Q11

But it is also very volatile

Interest rate ma be maintained until 2 11.



15/21

Source: Centralbanks website



16/21

Th m r ri k

Some rating upgrade in 2011 will help Indonesia into

Rating Agency Rating Outlook Upgrading

Moodys InvestorService

Ba2 Positive Ba1

Standard & Poors BB Positive BB+

Fitch Ratin BB+ Stable BBB- Positive

Japan Credit Rating

Agency

BBB- Stable Positive

Rating & InformationInc

BB+ Stable BBB-/Positive

16Source: IRU-BI

Samuel Sekuritas Indonesia


17/21

exposure on Indonesian asset (Volatile short-term

inflows). Interest rate may go back to its up-trend creating

concern that foreign funds may pull out

other emerging economies such as South Korea,Thailand, Brazil.

Inflation threat due to:

Higher price for rice and other basic commodities

continue.



18/21

Budget macro assumption:

- -

2009 2010 2010 2011

. . . .

Inflation rate (%) 4.5 5.0 5.3 5.3

Interest rate SBI 3m % 7.5 6.5 6.5 6.5

Exchange rate (Rp/USD) 10,500 10,000 9,200 9,250

ICP (USDpbr) 60 65 80 80

Lifting (mbpd) 0.96 0.965 0.965 0.97

Fiscal deficit (% of GDP) 2.5 1.6 2.2 1.7

Source: Ministry of Finance



19/21

2010p 2011*

. .

Inflation rate (%) 6.5 6.5

BI Rate (%) 6.75 7.0

, - , , - ,

*PreliminaryP Projection



20/21

R r h T mR r h T m

Christine Salim Lana SoelistianingsihHea o ResearcSector Coverage: Strategy, Mining, Resources,Plantation, Conglomerate

+6221 2854 8115+6221 83703280

Economist+6221 2854 8114

[email protected]

[email protected]

Adrianus Bias Prasuryo Joseph Pangaribuan

Analyst

Sector Coverage: Telecommunication,Cement, Construction, Property+6221 2854 8116adrianus.bias e-samuel.com

Analyst

Sector Coverage: Banking, Heavy equipment, Auto+6221 2854 [email protected]

Yualdo Yudopraw iroAnalyst

Sector Coverage: Metal, Consumer goods,

+6221 2854 [email protected]

2020


21/21

Thank YouThank You

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objectivity in making any recommendations.

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economic outlook 2011_deserve premium

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