Jun 17, 2016 08:44:44
Indonesia’s Top Stock Picker Likes Noodle-Maker, Tobacco Shares
By Harry Suhartono

(Bloomberg) -- Buying consumer stocks and avoiding banks
has proved a winning formula for the manager of Indonesia’s top-
performing share fund. To maintain returns, PT Samuel Aset
Manajemen is focusing on companies that are benefiting from a
rise in spending by lower-income people.
PT Indofood CBP Sukses Makmur ($ICBP), an instant noodle-maker, PT
Gudang Garam ($GGRM), a tobacco company, and PT Telekomunikasi Indonesia ($TLKM)
are among Samuel’s top picks, President Director Agus Yanuar
said in an interview in his office in Jakarta. They are
benefiting from an increase in consumer spending driven by
rising raw-material prices and policies to help poorer people,
he said.
“The rebound in commodity prices has helped lower-income
consumers,” said Yanuar. “That, combined with the decision to
lift the threshold for non-taxable income and the various
government assistance for education and health care, has boosted
Indonesia’s key raw-material exports including coal, tin
and palm oil have rallied this year, providing more work in
commodity-dependent areas like Sumatra and Kalimantan and having
a flow-on effect to local businesses. A sevenfold jump in the
amount earmarked for social security programs in this year’s
budget and a 50 percent increase in the level of income
Indonesians don’t have to pay tax on is also putting more money
in wallets.
Samuel Aset’s SAM Indonesian Equity Fund has returned 15
percent so far this year, beating all peers with assets of more
than 1 trillion rupiah ($75 million) and tripling the Jakarta
Composite Index’s 4.8 percent advance, according to data
compiled by Bloomberg.
Southeast Asia’s largest economy grew at the slowest pace
since 2009 last year and President Joko Widodo is attempting to
spur growth via infrastructure spending, pressuring banks to
lower lending rates and a planned tax amnesty, which the central
bank estimates could lure about 560 trillion rupiah of
undeclared income from overseas.
Samuel went underweight Indonesian banks after the
Financial Services Authority said in February that it would cap
deposit rates and force lenders to make similar reductions to
their loan rates, said Yanuar, who helps manage the SAM
Indonesian fund. The Jakarta Finance Index is the worst
performer among nine industry measures on the JCI this year,
declining 2.8 percent.
The Jakarta Consumer Goods Index has risen 11.4 percent in
2016. Indofood is up 24 percent, Gudang Garam has rallied 15
percent and Telkom has advanced 25 percent.