INDONESIA-Banking stocks rally, led by Bank Negara Indonesia The Jakarta finance index rose 2.69 percent on Friday, leading the broader Jakarta Composite Index which was up 1.2 percent.
Shares in Indonesia’s largest bank PT Bank Negara Indonesia soared as much as 10.19 percent to 4,325 rupiah, followed by state-owned peers Bank Mandiri and Bank Rakyat Indonesia which jumped as much as 4.94 percent and 2.52 percent respectively.
“As of November 2012, Bank Negara Indonesia’s earnings only reached 6.5 trillion rupiah, while annualised earning could reach around 7.1 trillion or 6 percent above consensus’ full-year 2012 estimate of 6.7 trillion,” said Robby Hafil, a Jakarta-based banking analyst at Trimegah Securities.
On valuation, the bank is traded at 1.9x profit to book value (PBV), cheaper compared to other big banks which average at 3x PBV. Furthermore, BBNI’s stock performance has underperformed compared to the Jakarta financial index, he said.
A day before, Bank Rakyat Indonesia announced its full-year 2012 earnings after Moody’s Investors Service said that Indonesian banking system outlook will remain stable for the next 12-18 months, based on a conducive operating environment which is supportive for asset quality and profits.
