ILLUSTRATION. Apart from the omnibus law, the trend of low interest rates is also a good catalyst for the cement industry.
Reporter: Akhmad Suryahadi | Editor: Wahyu T. Rahmawati
KONTAN.CO.ID – JAKARTA. The omnibus law broomstick law is believed to bring a flow of foreign direct investment funds (foreign direct investment) to the homeland. This also has a positive impact on cement issuers because it will affect the level of infrastructure development to property in the country.
Apart from the omnibus law, the trend of low interest rates is also an indirect catalyst for the cement industry. Antonius Marcos, Corporate Secretary of PT Indocement Tunggal Prakarsa Tbk (INTP) explains, with low interest rates, the public can invest in the property sector, which in turn has an effect on rising domestic cement consumption. “This is one of the government policies that support the business world,” said Marcos.
In the August 2020 period, INTP cement sales reached more than 1.5 million tons. Marcos said, August is one of the months with the highest volume this year. Meanwhile, if accumulated, INTP cement sales during the first eight months of 2020 reached more than 11 million tons.
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Although DKI Jakarta, which is one of INTP’s main market shares, had reimposed large-scale social restrictions (PSBB), INTP did not change its sales target this year, which is projected to fall in the range of 5% to 7% from the previous year. As an illustration, INTP’s sales volume last year reached 18.1 million tons. INTP also predicts market share (market share) in West Java and DKI Jakarta, which are the two main areas of the INTP market, are in the range of 46.2% by the end of this year.
Meanwhile, analyst Phillip Sekuritas Indonesia, Anugerah Zamzami Nasr, assessed that another positive catalyst that may be the driving force for cement sales this year is the stable price of cement in the market so it is hoped that the phenomenon of price wars between players will not occur. In addition, the efficiency carried out by issuers and the trend of low energy commodity prices is considered sufficient to ease the burden on cement issuers. Among the four cement companies, Zamzami recommends the shares of PT Semen Indonesia Tbk (SMGR) with a target price of IDR 12,000 per share.
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