Investment Cautious Optimistic

Transcription

1 Investment Cautious Optimistic PT Schroder Investment Management Indonesia January 2009

2 Credit crunch This time it s different Recent Bear Markets 1973/1974 Oil price shock 1981/1982 Tightening of monetary policy 1987 Program Trading? 1990 S&L Crisis 2000/2002 Asset price bubble 2007/? Credit Crisis/Sub Prime It is always different! 1

3 The financial crisis update Write downs and capital injections Source: Bloomberg, as of 8 Jan

4 The financial crisis update Key indicators as at 30 September 2008 Write offs, capital raised, job losses 000 s USD$ BN Index (Base 100 = January 2007) Bank share prices 0 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Job losses Write-offs USD Billions, rhs Capital raised USD Billions, rhs 0 30 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 S&P500 Banks DJ Euro Stoxx Banks Source: Thomson Datastream, Bloomberg 3

5 Chances of success the scale of the crisis Large in absolute terms, less threatening as share of GDP Billions USD$ % US Savings and loan ( ) Japan banking crisis ( ) Asia banking crisisus Subprime crisis ( ) ( present) Bank losses Other financials Percent of GDP, rhs Source: World Bank, IMF staff estimate All costs are real 2007 dollars. Asia includes Indonesia, Korea, the Philippines, and Thailand 4

6 The credit crunch: breaking the downward spiral Feed back from financial sector to the real economy and back Regulator + Shareholders Increase in risk aversion Treasury intervention (TARP) Increase in Bank write-offs Unwillingness to lend 1 Started here Increase in defaults We are here Contraction in credit Dec-06 Weaker activity Monetary policy Source: Schroders 5

7 Money Market rate and Mortgage rate 6

8 World GDP growth: the two speed world Global Growth Forecast 9 Last US recession

9 Global Growth and Inflation 8

10 9 9 United States Japan Germany China United Kingdom France Italy Canada GME** Spain Brazil Russia Korea India Mexico Australia GCC* Netherlands Belgium Switzerland Sweden Turkey Taiwan Indonesia Norway Poland Austria GDP relative to other countries GDP (Current prices) $bn 14, *Gulf Cooperation Council (GCC) countries: Bahrain, Kuwait, Qatar, Oman, UAE, Saudi Arabia ** Greater Middle East (GME): GCC + Turkey + Israel Source: Goldman Sachs. April

11 Developed Countries VS Emerging Market Replication of problems. Is it possible in emerging market? The squeeze in dollar availability could act as the catalyst, even if a banking system had relatively low exposure to dollar liabilities To fix it, it will need governments to step in however not all governments have the capacity for intervention Countries which have relied on external funding, will find that it will no longer easy (. drop in GDP and depreciation of the currency) IF the countries also have a high level of external debt then a rapid drop in the currency increases the risk of default in the government or corporate debt. BUT the global growth will continue relied on the growth of emerging market, especially Emerging Market Asia 10

12 GDP Consensus forecast 11

13 Emerging Stock Market Effects If Emerging market on average well placed, why are they doing so badly? There are several reasons Developed market credit crisis has caused a global de-leveraging. Reducing debt and selling any asset for cash quickly, even at depressed price damaging all assets prices including equities Emerging market have seen a lot of inflows over the last 4 years and many investors still in profits Emerging market are seen as one of the riskier equity asset classes. In times of trouble investors reduce riskier assets In the time of uncertainties, emerging market often have more uncertainties over earnings. 12

14 Indonesian Stock Market Effects Crisis or not crisis? The valuation are cheap. With the uncertainties about earning, there is a doubt on earnings forecast and hence P/E will be. However, the current P/E ratio and Price to Book Value, showing a level when we are in the crisis in other words a prolonged GDP growth on a par with developed markets or previous crisis. We believe, the things are as do not as bad as Number of key variables have dramatically improved. A large cyclical slowdown is clearly will occur but not a complete macro-economy disaster. We will still get the turbulences, but it should be able to recover stronger than developed countries 13

15 Equities Best value proposition for a long time: Low PEs promise high future returns Low PEs protect against high inflation (low risk of PE multiple compression) Buy high dividend yield stocks (as equities computing with cash) Big caps have better liquidities compare to small caps Defensive stocks in the better positions at the current situation Better buy after price falls than price rises! 14

16 Regulatory disclaimer This document is for information purposes only. It is not intended as promotional material in any respect and may not be circulated, published, reproduced or distributed to any other person without our prior written consent. This document is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. The content of this document and all confidential information relating to any Schroders plc group company must be treated by you in the strictest confidence, should not be disclosed to any third party and should only be disclosed to those of your employees, agents and professional advisers who are required to see such information for the purposes of carrying out their professional/regulated duties. You should ensure that these persons are made aware of the confidential nature of such information and treat it accordingly. You acknowledge and agree that unauthorised disclosure or use of confidential information would cause irreparable harm, damages would not be an adequate remedy and we shall be entitled to all forms of equitable relief. Reliance should not be placed on the views and information in the document when making individual investment and/or strategic decisions. Schroders has expressed its own views and opinions in this document and these may change. Although the information and opinions contained in this document have been obtained from sources we consider to be reliable, no responsibility can be accepted for errors of fact or opinion. The information herein is also affected by market conditions and may not reflect at all times the exposure of the relevant fund to the named counterparties. Exposures may rise as well as fall and we have no obligation to update you on any changes." PT Schroder Investment Management Indonesia Jakarta Stock Exchange Building Tower 2, 31th floor Jl. Jend. Sudirman Kav Jakarta 12190, Indonesia Telephone: Fax:

17 Questions & Answers Q & A Thank You

18 Asset allocation roadmap Preferred asset class by stage of the economic cycle Cash Slow-down Market Neutral HF Cash Govt. Bonds High Yield Recession Macro HF Distressed Sec HF Equity Recovery EM Global HF Equity Equity Equity Equity Expansion Event Driven HF Equity Commodities Asset classes behave differently as we move through the economic cycle Information on the cycle is combined with that on interest rates and valuation to determine asset allocation Key: Preferred asset class by stage of the cycle is based on risk adjusted excess returns (Sharp ratio) 17 Source: Schroders

19 Indonesia Economics Indonesian Economics Expectation 2009 Year F GDP(%) Inflation Kurs(USD/IDR) end of yr BI rate (%) end of yr Cadangan Devisa (USD bio) Source : Bloomberg: Economics Consensus and Departemen Keuangan As of 8 Jan

20 Indonesia Economics Historical Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 GDP (%yoy) Inflation %YoY Kurs (USD/IDR) 2,338 2,342 2,340 2,383 2,419 2,450 3,275 4,650 8,325 14,900 10,700 8,025 8,685 6,726 8,386 7,100 7,590 8,735 8,780 9,595 BI rate (%) n/a n/a Cadangan Devisa Source : BPS & Bank Indonesia 19

21 JCI How low can it go? JCI - HISTORICAL MONTHLY CHANGES No Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total % 2.06% -6.12% -1.54% 6.74% 4.10% -0.45% % 10.67% -8.46% % 0.00% % % -0.73% 12.24% % -8.62% 6.05% 8.03% % % 8.92% 28.43% 3.05% -0.91% % -3.85% -0.62% 25.81% 18.18% 13.12% -9.69% -5.16% -3.37% 8.38% -1.70% 15.95% 70.06% % -9.40% 1.17% -9.69% % 13.38% -4.45% -5.24% -9.66% -3.79% 5.89% -3.00% % % 0.63% % -5.99% 13.30% 7.82% 1.48% -1.92% -9.89% -2.23% -0.89% 3.08% -5.83% % 0.36% 6.29% 10.85% -0.61% -4.86% -8.19% -4.31% -5.49% % 5.79% 8.84% 8.39% % 2.77% -0.30% 13.28% 9.74% 2.17% 0.49% 4.27% 12.83% 4.67% -1.35% 12.12% 62.82% % 1.08% -3.34% 6.49% -6.50% -0.02% 3.36% -0.30% 8.67% 4.92% 13.63% 2.30% 44.56% % 2.72% 0.59% -4.68% 5.69% 3.14% 5.34% % 2.78% -1.21% 2.85% 6.02% 16.24% % -0.13% 7.50% 10.69% -9.18% -1.48% 3.16% 5.89% 7.22% 3.13% 8.61% 5.04% 55.30% % -0.93% 5.17% 9.19% 4.26% 2.64% 9.79% -6.57% 7.51% 12.05% 1.70% 2.14% 52.08% % 3.60% % -5.83% 6.07% -3.90% -1.90% -6.01% % % -1.21% 9.17% % Down Up % Source : Bloomberg As of 30 December

22 Market has dropped significant in 2008 Source : Bloomberg As of Dec 15,

23 Market has dropped significant in 2008 Source : Bloomberg As of Dec 15,

24 Valuation and Growth - Global Source: Bloomberg 23

25 Valuation and Growth - Asia Source: Bloomberg 24

26 Valuation and Growth - Asia Source: Bloomberg 25

27 Market declines often followed by strong returns Source: Morgan Stanley, FTSE, as at 1/10/08 26

28 Bond Yield Curve Source : Bloomberg As of 9 Jan

29 Kepemilikan SUN yang Dapat Diperdagangkan Per 11 December 2008 Sumber: Dept. Keuangan RI 28

30 29 Inflation Rate vs SBI Rate As of 30 November % 20.00% 15.00% 10.00% 5.00% 0.00% -5.00% Jul-07 Mar-08 Nov-08 Mar-06 Nov-06 Jul-05 Nov-04 Inflation SBI Jul-99 Mar-00 Nov-00 Jul-01 Mar-02 Nov-02 Jul-03 Mar-04

31 Bond Market We welcome the government ability to secure loan from multinational institution and foreign countries. This is an international recognition to the long term solid track record demonstrated by the government. Next year budget financing should be manageable given the USD 5bn standby loan provided by the World bank (USD 2bn), ADB(USD 1bn), Japan (USD 1 bn) and Australia ( USD 1bn).Global liquidity crisis will have an impact to IDR Bond market. Therefore, market demand will be softened until sentiment improved We believe the rally may sustain until the 1H09 in view that global economic slowdown will reduce demand, and eventually will be reflected in lower commodity prices. This should help Indonesia to achieve much lower inflation, probably to 5% - 6% in the 2nd quarter or 3rd quarter this year. The Central bank will subsequently follow the trend with a chance to cut rate by bps FY

32 Schroder Dana Andalan Performance Change 1.40% Schroder Dana Andalan Month-on-Month Return Percentage Change 0.90% 0.40% -0.10% -0.60% Nov-03 Apr-04 Sep-04 Feb-05 Jul-05 Dec-05 May-06 Oct-06 Mar-07 Aug-07 Jan-08 Jun-08 Nov % -1.60% As at 30 December

33 Schroder Dana Mantap Plus Performance Change 14.00% Schroder Dana Mantap Plus Month-on-month Return Percentage Change 11.00% 8.00% 5.00% 2.00% -1.00% -4.00% May-02 Jun-03 Jul-04 Aug-05 Sep-06 Oct-07 Nov % % % As at 30 December

34 Schroder Dana Mantap Plus II Performance Change 15.00% Schroder Dana Mantap Plus II Month-on-Month Return Percentage Change 11.00% 7.00% 3.00% -1.00% -5.00% Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec % % % As at 30 December

35 Schroder Dana Obligasi Ekstra Performance Change 4.00% Schroder Dana Obligasi Ekstra Month-on-Month Return Performance change 3.00% 2.00% 1.00% 0.00% -1.00% -2.00% May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec % -4.00% -5.00% -6.00% As at 30 December

36 Schroder Dana Kombinasi Performance Change 5.50% Schroder Dana Kombinasi Month-on-Month Return Percentage Change 2.50% -0.50% Dec % Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec % -9.50% % As at 30 December

37 Schroder Dana Terpadu Performance Change 16.00% Schroder Dana Terpadu Month-on-Month Return Percentage Change 13.00% 10.00% 7.00% 4.00% 1.00% -2.00% -5.00% Oct-00 May-01 Dec-01 Jul-02 Feb-03 Sep-03 Apr-04 Nov-04 Jun-05 Jan-06 Aug-06 Mar-07 Oct-07 May-08 Dec % % % As at 30 December

38 Schroder Dana Terpadu II Performance Change 9.00% Schroder Dana Terpadu II Month-on-Month Return Percentage Change 4.00% -1.00% May % Aug-06 Nov-06 Feb-07 May-07 Aug-07 Nov-07 Feb-08 May-08 Aug-08 Nov % % As at 30 December

39 38 Schroder Dana Prestasi Performance Change 32.00% Schroder Dana Prestasi Month-on-Month Return Percentage Change 26.00% 20.00% 14.00% 8.00% 2.00% -4.00% % % % % % As at 30 December 2008 Dec-07 Jun-08 Dec-08 Jun-97 Dec-97 Jun-98 Dec-98 Jun-99 Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07

40 Schroder Dana Prestasi Plus Performance Change 24.00% Schroder Dana Prestasi Plus Month-on-Month Return Percentage Change 20.00% 16.00% 12.00% 8.00% 4.00% 0.00% -4.00% -8.00% % Oct-00 May-01 Dec-01 Jul-02 Feb-03 Sep-03 Apr-04 Nov-04 Jun-05 Jan-06 Aug-06 Mar-07 Oct-07 May-08 Dec % % % % % As at 30 December

41 Schroder Dana Istimewa Performance Change 6.00% Schroder Dana Istimewa Month-on-Month Return Percentage Change 3.00% 0.00% -3.00% Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec % -9.00% % As at 30 December