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What keeps Matahari’s solid performance distinct from that of its competitors is the strength of its private brands, such as the award-winning Nevada. As such, we have noticed larger sales contributions from its direct purchase items vis-à-vis consignment items. We also have witnessed that its focus on utilities expense reduction resulted in operating 1Q16 margins.

Indonesia primary market this week was active with at least three issuers offering new bonds, they are; Siantar Top (A/Stabil), Maybank Finance (AA+/Stabil) dan OCBC NISP (AAA/Stabil). Strong demand during the bookbuiding and lower govvies yield in the secondary market have pushed issuers to lower coupon rates. Maybank Finance priced their 3 year and 5.

On rating front, Indonesia Eximbank and Astra Sedaya Finance (ASF) were affirmed at AAA/Stable by Pemeringkat Efek Indonesia (Pefindo). Both companies are benefited from strong their majority shareholders’ support. Besides that, the AAA rating on Eximbank also reflects their strong market share in export finance as well as solid liquidity profile. As for ASF, their.

There were there corporate downgraded by Pemeringkat Efek Indonesia (Pefindo) last week. Buana Finance (BFIN:IJ) was downgraded to idBBB+/Stable from ‘idA-/Negative mainly driven by ongoing pressure on its financing lease business that resulted in weakening market position due to lower new booking since FY2014. The declining asset quality and lack of affiliation also weigh down.

The last two bonds offering this month received decent demand from investors. Recent new bonds offered by Sarana Multigriya Finansal (idAA+/Stable) was oversubscribed by 2 times registering a total demand of IDR 2trn yet the company only issued IDR630bn. Oversubscription was seen also in Federal Finance’s (FIFA) new continuous bonds offering that received IDR3.9trn demand,.

Despite the heated competition from more foreign players in the market, we believe Matahari would remain the winner. Its strong private brands portfolio for its target market enabled the firm to achieve margins expansion in 2015 while an excellent balance sheet and strong operating cash flow facilitated the opening of 11 stores last year. Maintain.

Indonesia Bank Pembangunan Daerah Sulawesi Selatan and Barat’s (Bank Sulselbar) rating and its outstanding bond I/2011 were upgraded to ‘idA+’ from ‘idA’. The rating on bank’s sukuk mudharabah I/2011 was also upgraded to ‘idA+(sy)’ from ‘idA(sy)’ with a stable outlook. The rating upgrade due to its financial indicators are continuously improved including capitalization and asset.

Eximbank (idAAA/Stable) will list three new bonds series on Monday (22/02) where likely dominate secondary market activity next week. However, the offering coupon rate for these three new bonds series seem to be fairly valued relative to other Eximbank’s bonds being traded in the secondary market. For series A (370 days), Eximbank offers 8.5% coupon.

Bank Indonesia’s rate cut and debt refinancing would drive some SOE’s to raise capital from bond issuance this year. Waskita Karya Tbk (WSKT:IJ idA/Stable) and Jasa Marga Tbk (JSMR:IJ idAA/Stable) seeks to release bonds worth IDR 2 trn and IDR 1,5 trn respectively. Waskita’s bond will be part of its two years bond program worth.

Fitch Rating Indonesia upgraded national rating on Bank Tabungan Pensiunan Nasional Tbk (BTPN) to  AAA(idn) from AA+(idn) with a stable outlook. The upgrade was driven by its parent’s strong credit profile, Sumitomo Mitsui Banking Corporation (SMBC) which its rating also upgraded to ‘A’ from ‘A-‘ last year. The rating upgrade on BTPN indicates strong tendency.