Medco Energi Outlook Remains Negative; Asuransi Sinar Mas on Stable Outlook
On rating action, Pemeringkat Efek Indonesia (Pefindo) has maintained idA+ with negative outlook on Medco Energi Internasional, Tbk (MEDC IJ) amid its more aggressive capital structure following the acquisition of Newmont Nusa Tenggara (NTT). However, the acquisition is expected to positive affect the rating as the company may receive potentially higher cash flow from NTT. The NTT’s business though still exposed to commodities prices risk as well as risk related to export licenses and development of business in downstream sector. Elsewhere, Fitch affirmed AA+(idn) on Asuransi Sinar Mas (ASM) with its outlook was revised to Stable from Positive. The affirmation is based on the following; i) strong market franchise with the company holding 9.4% of market share in non-life insurance industry in 2015 ii) solid capitalization as reflected by high regulatory risk-based capital (RBC) ratio that has remained consistently above 200% for the past 5 years, iii) healthy operating profitability iv) stable liquidity profile with cash equivalents and fixed-income securities making up more than 75% of its investment portfolio at end-2015.
