April 10, Market commentary. Macro update March Consumer Confidence: Pressure ahead of the election

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1 To subscribe to our Daily Focus, please contact us at Market Index Last Trade Chg (%) MoM YoY JCI 6, MSCI Indonesia MSCI EM 1, HANG SENG 30, KOSPI 2, FTSE 7, DJIA 26, NASDAQ 7, Valuation 2018F P/E (x) P/B (x) ROE (%) JCI Key Rates Last Trade Chg (bps) MoM YoY BI 7-Day RR yr yr FX Last Trade Chg (%) MoM YoY USD/IDR 14, USD/KRW 1, USD/JPY USD/CNY Commodities Last Trade Chg (%) MoM YoY WTI Gold 1, Coal Palm Oil 2, Rubber Nickel 13, Copper 6, Tin 20, JCI Index VS MSCI Emerging Markets (pt) 7,000 6,000 5,000 JCI MSCI EM (pt) 1,550 1,300 1, , /1607/1601/1707/1701/1807/1801/19 Market commentary Hariyanto Wijaya CFA, CPA (Aust), CMT (hariyanto.wijaya@miraeasset.co.id) JCI closed higher +0.9% led by bank sector as foreign investors keep booking net buying. Although IMF cut its forecast on global growth to the lowest level since the financial crisis amid a bleaker outlook in most advanced economies, IMF keeps maintaining its forecast on FY19 Indonesia GDP growth at 5.2%. Indonesia steady GDP growth should trigger more fund inflow to Indonesia. Therefore, we expect JCI to trade mixed to higher today on the back of continuing foreign inflow. US Indices closed lower on the back of the combination of concern of weak 1Q19 earnings and slowing US economy as IMF cut its forecast for FY19 US GDP growth to 2.3%, down by 0.2%p since its last global outlook in January US 1Q19 earnings season would start since Friday. 1Q19 earnings of S&P 500 companies are expected to fall 2.5%YoY, although its revenue is estimated to increase by 4.8% YoY. Macro update March Consumer Confidence: Pressure ahead of the election Mangesti Diah Sulistiani (mangesti@miraeasset.co.id) The consumer confidence index (CCI) for March slightly eased to 124.5pt (-0.5% MoM; +2.4% YoY; vs. February figure of 125.1pt), marking the lowest point since November 2018 (122.7pt). That said, it came in higher than the market forecast (122.7pt). Looking at the big picture, consumer confidence came under some pressure ahead of the 2014 presidential election, and the same thing seems to be happening now. We attribute the pre-election pressure to (1) perceptions of current economic conditions and (2) optimism on economic conditions for the next few months, which both declined slightly. The current economic conditions index (CECI) in March declined 0.4% MoM and 1.2% YoY to 108.9pt (vs pt in February and 110.2pt in March 2018). The consumer expectations index (CEI) in March also declined 0.5% MoM to 140.2pt (vs pt in February), though YoY growth has remained positive since 4Q18. In March, consumers showed a higher tendency to allocate their income to savings; the savings-to-income ratio rose to 20.1% from 19.1% in February. Meanwhile, consumption (average propensity to consume/apc) and loan repayment (debt-to-income ratio) allocations both slightly declined in March to 68.1% and 11.8%, respectively. With the festive month just around the corner, we expect inflationary pressure to pick up from May until June, as consumption is expected to accelerate alongside higher demand for goods and services. As for April, we believe inflationary pressure will remain under control due to sufficient supply of goods and stable distribution. Moreover, we expect consumer confidence to remain stable in the coming months, as we see stable economic conditions ahead.

2 Local flash TOTO: TOTO 2018 profit jumped 24% to IDR billion. PT Surya Toto Indonesia Tbk's listed companies producing sanitary products, fittings, and kitchen systems recorded a positive performance in These issuers with the TOTO stock code posted a current year's profit of IDR billion or jumped 24.2% compared to 2017 which amounted to IDR 278, 93 billion. The revenue came from fitting sales of IDR 1.15 trillion, sanitary IDR billion, kitchen system equipment IDR billion and sales of electronic equipment and accessories amounting to IDR 7.93 billion. (Kontan) WTON: The WTON contract is dominated by the infrastructure sector. Infrastructure projects are the mainstay of increasing concrete company contracts. One of them is PT Wijaya Karya Beton Tbk. Yushadi, Wika Beton's Investor Relations Manager said that the acquisition of contracts has always been dominated by the infrastructure sector. As an illustration he mentioned last year that the infrastructure sector dominated contracts up to 69%. "This year the projections are 50% -60%. Then there are from the energy sector, (Kontan) BIRD: Blue Bird (BIRD) there is no plan to add a new fleet in PT Blue Bird Tbk (BIRD) has no plans to add new fleets in The total Blue Bird Fleet is around 29,000 vehicles consisting of regular taxis, executive taxis, rentals and buses. Michael Tene, Head of Investor Relations at BIRD, explained that currently, overall, he has not planned to add to the fleet. "But if market conditions turn out to be more conducive, then we can just add to the fleet," (Kontan) ERAA: ERAA is targeting to open 330 new stores this year. PT Erajaya Swasembada Tbk will again add outlets. This is reflected in the achievement of last year with the success of the company's performance growth due to the expansion of outlets that were carried out. Djatmiko Wardoyo, Director of Marketing and Communications at PT Erajaya Swasembada Tbk, said that the company plans to add 330 new stores this year. "This year is still a year of expansion for the company where the company has aspirations to be able to open up to 330 retail stores throughout 2019," (Kontan) JECC: Jembo Cable Company (JECC) targets sales to grow 10% in PT Jembo Cable Company Tbk is not too high to set a performance growth target this year. This cable provider company aims to increase net sales by 10% compared to last year's acquisition. Net income this year will tend to be stagnant because this year is a political year, that's why they are not too high in setting growth targets for financial performance. (Kontan) MIKA: Mitra Keluarga Karyasehat (MIKA) is optimistic that it will achieve an increase in income in Despite recording a decline in net income in 2018, PT Mitra Keluarga Karyasehat Tbk (MIKA), a member of the Kompas100 index, is optimistic that it can reap increased revenues this year. Citing data from MIKA's 2018 financial report, the company experienced a decrease in net profit of 7.1% or IDR 659 billion in In 3017, MIKA recorded a net profit of IDR 709 billion. Aditya Widjaja, Investor Relations MIKA explained that the decline was caused by the financial income that had dropped due to the expansion and purchase of land. "In 2018 we expanded a lot and bought land. This caused the managed cash to be lower, (Kontan) 2

3 Technical analysis Tasrul Summary Jakarta Composite Index (JCI) Consolidation Item Data Item Data Close (April 9, 2019) (+0.91%)Trading range 6,436-6,495 8Average index performance (%) 3.64 Target Period Daily 6,495 r-squared Weekly 6,517 Volatility (+/-, %) +0.44/ Monthly 6,619 Volatility (+/-, point) / Stop loss 6,383 Source: Research Figure 1. Daily, Short term trend Uptrend ^JKSE [ ^JKSE ] - Daily - 4/9/2019 Open: 6,435 High: 6,484 Low: 6,430 Close: 6,484 Vol. 10,381,524,992 Prev. Avg. Price: 6,466.1 R-Squared: Period: 128 Std.Dev: 1.51 Volatility (+) : Volatility (-) : V-Ratio : 0.94 Chg.: 0.91% 6, , , , , , , , , , Optimization Trading System ^JKSE - Volume = 10,381,524,992.00, MA(Volume,12) = 10,369,221, ,381,524,992 10,369,221,632 Oct Nov Dec 2019 Feb Mar Apr Source: Research 3

4 Figure 2. Daily, Short term trend, MFI optimized & RSI optimized ^JKSE - MFI Smoothed = X` x`x` ^JKSE - RSI Smoothed = ^JKSE [ ^JKSE ] - Daily - 4/9/2019 Open: 6,435 High: 6,484 Low: 6,430 Close: 6,484 Vol. 10,381,524,992 Prev. Avg. Price: 6,466.1 R-Squared: Period: 128 Std.Dev: 1.51 Volatility (+) : Volatility (-) : V-Ratio : 0.92 Chg.: 0.91% 6, , , , Optimization Trading System ^JKSE - Volume = 10,381,524,992.00, MA(Volume,12) = 10,369,221, ,381,524,992 10,369,221, Feb Mar Apr Source: Research 4

5 Figure 3. Weekly Trend Uptrend, MFI optimized & W%R optimized ^JKSE - MFI Smoothed = A ^JKSE - Will%R Smoothed = ^JKSE [ ^JKSE ] - Weekly - 4/9/2019 Open: 6,480 High: 6,484 Low: 6,391 Close: 6,484 Vol. 20,937,547,776 Prev. Avg. Price: 6,453.1 R-Squared: Period: 30 Std.Dev: 1.43 Volatility (+) : Volatility (-) : V-Ratio : 0.76 Chg.: 0.16% 6, , , , Optimization Trading System ^JKSE - Volume = 20,937,547,776.00, MA(Volume,9) = 45,803,286, ,803,286,528 Jul Oct 2018 Apr Jul Oct 2019 Apr 20,937,547,776 Source: Research Figure 4. Daily : 6,436 6,495 Figure 5. Weekly : 6,369-6,517 Figure 6. Monthly : 6,272 6,619 ^JKSE [ ^JKSE ] - Daily - 4/9/2019 Open: Prev. Avg. Price: 6,466.1 R-Squared: Period: 128 Std.Dev: 1.51 Volatility (+) : Volatility (-) : V-Ratio : 0.94 Chg.: 0.91% 6,494.5 x ^JKSE [ ^JKSE ] - Weekly - 4/9/2019 Open: Prev. Avg. Price: 6,453.1 R-Squared: Period: 30 Std.Dev: 1.43 Volatility (+) : Volatility (-) : V-Ratio : ,517.2 Chg.: 0.16% x x` ^JKSE [ ^JKSE ] - Monthly - 4/9/2019 Open: Prev. Avg. Price: 6,460.6 R-Squared: Period: 46 Std.Dev: 1.46 Volatility (+) : Volatility (-) : V-Ratio : ,619.1 Chg.: 0.24% 6, , , , , ,368.8 ^JKSE - Volume = 62,527,827, ^JKSE - Volume = 10,381,524, ^JKSE - Volume = 20,937,547, ,381,524, Apr 8 Feb Mar Apr 20,937,547,776 Apr ,527,827,968 Source: Research Source: Research Source: Research 5

6 Chart 7. JCI Vs. USD/IDR Chart 8. JCI performance (absolute vs. relative) (pt) JCI (L) USD/IDR (R) 6,600 (IDR) 15,400 (%, %p) 12 Absolute Relative 9.5 6,200 5,800 15,000 14,600 14, ,400 1/8 2/5 3/5 4/2 13, D 1W 1M 1Y Source: Bloomberg, Note: Relative to MSCI EM Index Source: Bloomberg, Chart 9. Foreigner s net purchase (EM) (USDmn) 1,400 1,200 1, ,191 Note: The latest figure for India are April 8 th, 2019 Source: Bloomberg, 1 Day 5 Days Korea Taiwan Indonesia Thailand Philippines India Chart 10. Energy price (D-3M=100) 140 CPO WTI Coal /8 2/5 3/5 4/2 Source: Bloomberg, Chart 11. Non-ferrous metal price (D-3M=100) Copper Nickel Tin 130 Chart 12. Precious metal price (D-3M=100) Silver Gold Platinum /19 02/19 03/19 04/19 Source: Bloomberg, 85 01/19 02/19 03/19 04/19 Source: Bloomberg, 6

7 Table. Key valuation metrics Company Name Ticker Price Market Cap Price Performance (%) P/E(X)* P/B(X)* ROE(%)* (IDR) (IDRbn) 1D 1W 1M 1Y FY18 FY19 FY18 FY19 FY18 FY19 Jakarta Composite Index JCI 6,484 7,399, FINANCIALS Bank Central Asia BBCA 27, , Bank Mandiri Persero BMRI 7, , Bank Rakyat Indonesia Persero BBRI 4, , Bank Negara Indonesia Persero BBNI 9, , Bank Tabungan Negara Persero BBTN 2,360 24, CONSUMER HM Sampoerna HMSP 3, , Gudang Garam GGRM 79, , Indofood CBP Sukses Makmur ICBP 9, , Indofood Sukses Makmur INDF 6,550 57, Kalbe Farma KLBF 1,540 72, Unilever Indonesia UNVR 49, , AGRICULTURAL Astra Agro Lestari AALI 12,375 23, PP London Sumatera Indonesia LSIP 1,180 8, Sawit Sumbermas Sarana SSMS 1,050 10, INFRASTRUCTURE XL Axiata EXCL 2,540 27, N/A Jasa Marga JSMR 6,175 44, Perusahaan Gas Negara PGAS 2,290 55, Tower Bersama Infrastructure TBIG 3,920 17, Telekomunikasi Indonesia TLKM 3, , Soechi Lines SOCI 161 1, N/A 0.2 N/A 4.2 N/A Garuda Indonesia GIAA , N/A N/A BASIC-INDUSTRIES Semen Indonesia SMGR 13,950 82, Charoen Pokphand Indonesia CPIN 6, , Indocement Tunggal Prakarsa INTP 22,325 82, Japfa Comfeed Indonesia JPFA 1,850 21, MINING Indo Tambangraya Megah ITMG 19,750 22, Adaro Energy ADRO 1,295 41, Aneka Tambang ANTM , Vale Indonesia INCO 3,340 33, Tambang Batubara Bukit Asam PTBA 4,070 46, TRADE United Tractors UNTR 26,425 98, AKR Corporindo AKRA 4,720 18, Global Mediacom BMTR 358 5, N/A 0.4 N/A 8.8 N/A Matahari Department Store LPPF 3,870 11, Media Nusantara Citra MNCN , Matahari Putra Prima MPPA 222 1, N/A N/A 2.1 N/A N/A Surya Citra Media SCMA 1,690 24, Siloam International Hospital SILO 3,900 6, PROPERTY Bumi Serpong Damai BSDE 1,470 28, Adhi Karya ADHI 1,685 6, Alam Sutera Relaty ASRI 354 6, Ciputra Development CTRA 1,145 21, Lippo Karawaci LPKR 306 7, Pembangunan Perumahan PTPP 2,220 13, Pakuwon Jati PWON , Summarecon Agung SMRA 1,170 16, Wijaya Karya WIKA 2,210 19, Waskita Karya WSKT 1,980 26, MISCELLANEOUS Astra International ASII 7, , Source: Bloomberg, *Note: Valuation metrics based on Bloomberg consensus estimates 7

8 Sector performance Top 10 market cap performance Name Index Chg (%) Ticker Price Market Cap (IDRbn) Chg (%) Agricultural 1, BCAP IJ 175 6, Mining 1, DUTI IJ , Basic-Industry INPP IJ 830 9, Miscellaneous Industry 1, FREN IJ , Consumer Goods 2, POOL IJ , Property & Construction BNLI IJ , Infrastructure 1, ABMM IJ , Finance 1, SDRA IJ 850 5, Trade AGRO IJ 336 7, Composite 6, SMRA IJ , Source: Bloomberg Top 5 leading movers Top 5 lagging movers Name Chg (%) Close Name Chg (%) Close UNVR IJ ,000 HMSP IJ ,600 ASII IJ 2.0 7,700 RODA IJ FREN IJ ZINC IJ BBCA IJ ,725 TLKM IJ ,970 BMRI IJ 1.0 7,650 SMCB IJ ,995 Source: Bloomberg Economic Calendar Time Currency Detail Forecast Previous 4:00am USD FOMC Member Quarles Speaks 5:45am USD FOMC Member Clarida Speaks 6:50am JPY Bank Lending y/y 2.3% 2.3% 6:50am JPY Core Machinery Orders m/m 3.0% -5.4% 6:50am JPY PPI y/y 1.0% 0.9% 7:30am AUD Westpac Consumer Sentiment -4.8% 9:30am AUD RBA Assist Gov Debelle Speaks 1:00pm JPY Prelim Machine Tool Orders y/y -29.3% 1:45pm EUR French Industrial Production m/m -0.5% 1.3% 3:00pm EUR Italian Industrial Production m/m -0.5% 1.7% 3:30pm GBP GDP m/m 0.2% 0.5% 3:30pm GBP Manufacturing Production m/m 0.2% 0.8% 3:30pm GBP Construction Output m/m -0.2% 2.8% 3:30pm GBP Goods Trade Balance -12.5B -13.1B 3:30pm GBP Index of Services 3m/3m 0.4% 0.5% 3:30pm GBP Industrial Production m/m 0.1% 0.6% 6:45pm EUR Main Refinancing Rate 0.00% 0.00% 6:45pm EUR Monetary Policy Statement 7:30pm EUR ECB Press Conference 7:30pm USD CPI m/m 0.3% 0.2% 7:30pm USD Core CPI m/m 0.2% 0.1% Tentative GBP NIESR GDP Estimate 0.1% 9:30pm USD Crude Oil Inventories 2.6M 7.2M 10:50pm USD FOMC Member Quarles Speaks Note: Time is based on Indonesian local time Source: Forex Factory 8

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