In July, investors will be anticipating for listed companies in the second quarter of 2016. After Stock Price Index (JCI) penetrated the psychological level of 5,000 points, the index will try to reach the level of 5,150 points. First Asia Capital recommends shares of the banking sector and infrastructure / construction as investors’ choice because these two sectors will reap the benefits of tax amnesty.
Amrin Tarin, Head Equity First Asia Capital, said that the banking sector is estimated to have a sufficiently high profit in the second quarter of 2016. The banks will receive additional liquidity from the repatriation of funds due to the Tax Amnesty Act, effective as of July 1, 2016. Shares of selection are those from state-owned banks namely PT Bank Mandiri Tbk (BMRI), PT Bank Rakyat Indonesia (BBRI), and PT BNI Tbk (BBNI). “The government predicts that the repatriation fund could reach up to Rp 1,000 trillion. The government seems to be too optimistic looking at a 9-month implementation, but they did have to set high targets,” said Amrin.
The flow of repatriation of funds into infrastructure projects will boost the share of construction companies such as PT Wijaya Karya Tbk (WIKA), PT Adhi Karya Tbk (ADHI), and PT Jasa Marga Tbk (JSMR). “In the long run, favorable tax amnesty policy for the government could boost economic growth because of its multiplier effect,” he said. (*)
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