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Sector Update | 24 June 2020
Sector Update | 24 June 2020

Mandiri Sekuritas Analyst

PMK 70/2020 - Bait to Get the Economy Rolling Again
The new PMK 70/2020 allows the government to place funds in commercial banks
Tjandra Lienandjaja
+6221 5296 9617 so they can extend more loans. An initial Rp30tn will be placed in four state banks
tjandra.lienandjaja@mandirisek.co.id at 3.4% pa for a maximum of six months. This provides additional liquidity for
banks, but not without risk.
Silvony Gathrie
+6221 5296 9544 The Ministry of Finance issues a new ruling, PMK 70/PMK.05/2020, which allows the
silvony.gathrie@mandirisek.co.id
government to place the state’s excess funds in commercial banks as a way to accelerate
the national economic recovery program (PEN) on handling the impact of COVID-19
outbreaks. The ruling on PEN is laid out in PP23/2020.
Sector: Banking
Eligible banks for the initial Rp30tn fund placement. The new regulation mentions the
eligibility of commercial banks for the state fund placement:
OVERWEIGHT 1. The bank is majority owned by Indonesians or Indonesian entities;
2. The bank must have a minimum composite health index level of 3 (1-5 with 5 being
the worst);
Stocks Recommendation
3. The bank supports the government’s acceleration of the national economic recovery.

Ticker Recom Price (Rp) TP (Rp) Banks need to apply to the Director General of Treasury of the MoF to become a partner
BBCA Neutral 28,525 26,500 bank for this purpose. As a start, the government will place Rp30tn funds in four state
BBNI Buy 4,740 5,900 banks: BBRI, BMRI, BBNI, and BBTN.
BBRI Buy 3,120 3,000 Funds’ tenor, rate, and usage restrictions. The MoF states in today’s press conference
BBTN Buy 1,215 1,350 that—aside from the placement of a maximum for six (6) months at the interest of 80% of
BDMN Buy 2,810 4,000 7-DRR rate of 4.25%, hence at 3.40% pa—the banks need to extend these funds into loans
BJBR Buy 780 860 at three times as much. The funds have restrictions: they cannot be used to buy
BJTM Buy 505 590 government papers nor foreign currencies.
BNGA Buy 735 840
BBRI states that it will use the funds to extend loans for the MSME segment involved in
PNBN Buy 830 1,100
food, distribution, and health related industries, with rural areas to get the most of the new
BTPS Buy 3,220 3,200 loan allocation (50%), with urban area at 30% and suburban at 20%. BMRI will give new
Source: Mandiri Sekuritas loans for tourism-related industries, BBNI for labor-intensive industries, and BBTN for
housing loans and construction.
Additional short-term liquidity for banks, but not without risk. While the initial four
state banks still have ample liquidity, the placement, which will be followed by new loan
extensions, should provide some incentives for the economy to start rolling again after the
2-3-month social-restriction period. However, as the loans are not guaranteed by the
government, banks will take some measured risks in channeling new loans to their
customers. The 3.4% cost of funds is similar to the average cost of funds of the four state
banks in 4M20, which ranged from 2.9% for BBNI and BMRI to 5.7% for BBTN.
The fund placement is not limited to the top 15 banks, hence open for domestically owned
banks, even those with a health index level of 3 (the health index level is not publicly
revealed). That said, the other regulation, PMK 64/PMK.05/2020 on fund placement on the
anchor banks, is less attractive for banks than the new one. Further technical instruction on
the new ruling should be out soon. We still maintain our Overweight call on the sector.

Please see important disclosure at the back of this report Page 1 of 2

 Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk
Menara Mandiri Tower I, 25th floor, Jl. Jend. Sudirman Kav. 54 – 55, Jakarta 12190, Indonesia
General: +62 21 526 3445, Fax : +62 21 527 5374 (Equity Sales)

RESEARCH
Adrian Joezer Head of Equity Research, Strategy, Consumer adrian.joezer@mandirisek.co.id +6221 5296 9415
Tjandra Lienandjaja Deputy Head of Equity Research, Banking tjandra.lienandjaja@mandirisek.co.id +6221 5296 9617
Ariyanto Kurniawan Automotive, Coal, Metal Mining, Chemical ariyanto.kurniawan@mandirisek.co.id +6221 5296 9682
Kresna Hutabarat Telecom, Media kresna.hutabarat@mandirisek.co.id +6221 5296 9542
Lakshmi Rowter Healthcare, Consumer, Retail lakshmi.rowter@mandirisek.co.id +6221 5296 9549
Robin Sutanto Property, Building Material robin.sutanto@mandirisek.co.id +6221 5296 9572
Edbert Surya Construction, Transportation edbert.surya@mandirisek.co.id +6221 5296 9623
Silvony Gathrie Banking, Research Assistant silvony.gathrie@mandirisek.co.id +6221 5296 9544
Riyanto Hartanto Poultry, Research Assistant riyanto@mandirisek.co.id +6221 5296 9488
Henry Tedja Research Assistant henry.tedja@mandirisek.co.id +6221 5296 9434
Wesley Louis Alianto Research Assistant wesley.alianto@mandirisek.co.id +6221 5296 9510
Leo Putera Rinaldy Chief Economist leo.rinaldy@mandirisek.co.id +6221 5296 9406
Imanuel Reinaldo Economist imanuel.reinaldo@mandirisek.co.id +6221 5296 9651

INSTITUTIONAL SALES
Silva Halim Managing Director silva.halim@mandirisek.co.id +6221 527 5375
Lokman Lie Head of Equity Capital Market lokman.lie@mandirisek.co.id +6221 527 5375
Andrew Handaya Institutional Sales andrew.handaya@mandirisek.co.id +6221 527 5375
Feliciana Ramonda Institutional Sales feliciana.ramonda@mandirisek.co.id +6221 527 5375
Henry Pranoto Institutional Sales henry.pranoto@mandirisek.co.id +6221 527 5375
Kevin Giarto Institutional Sales kevin.giarto@mandirisek.co.id +6221 527 5375
Sharon Anastasia Tjahjadi Institutional Sales sharon.tjahjadi@mandirisek.co.id +6221 527 5375
Talitha Medha Anindya Institutional Sales talitha.anindya@mandirisek.co.id +6221 527 5375
Angga Aditya Assaf Institutional Sales angga.assaf@mandirisek.co.id +6221 527 5375
Ilona Carissa Institutional Sales Ilona.simanungkalit@mandirisek.co.id +6221 527 5375
Kusnadi Widjaja Equity Dealing kusnadi.widjaja@mandirisek.co.id +6221 527 5375
Edwin Pradana Setiadi Equity Dealing edwin.setiadi@mandirisek.co.id +6221 527 5375
Jane Theodoven Sukardi Equity Dealing jane.sukardi@mandirisek.co.id +6221 527 5375
Michael Taarea Equity Dealing michael.taarea@mandirisek.co.id +6221 527 5375

RETAIL SALES
Andreas M. Gunawidjaja Head Retail Equities andreas@mandirisek.co.id 6221 5296 9693
Boy Triyono Jakarta boy.triyono@mandirisek.co.id 6221 5296 5678
Iedprima Intan Maradi Online Jakarta intan.maradi@mandirisek.co.id 6221 5296 9516
Ruwie Medan ruwie@mandirisek.co.id 6261 8050 1825
Linawati Surabaya linawati@mandirisek.co.id 6231 535 7218
Maulidia Osviana Lampung maulidia.osviana@mandirisek.co.id 62721 476 135
Aidil Idham Palembang aidil.idham@mandirisek.co.id 62711 319 900
Dhanan Febrie Handita Bandung dhanan.handita@mandirisek.co.id 6222 426 5088
Yuri Ariadi Pontianak yuri.ariadi@mandirisek.co.id 62561 582 293
Yogiswara Perdana Yogyakarta yogiswara.perdana@mandirisek.co.id 62274 560 596
Achmad Rasyid Bali achmad.rasyid@mandirisek.co.id 62361 475 3066
www.most.co.id care_center@mandirisek.co.id 14032

INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12-month period from the date of the last
published report, are: Buy (15% or higher), Neutral (-15% to15%) and Sell (-15% or lower).

DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, a member of the Indonesia Stock Exchanges (IDX) and Mandiri Sekuritas is registered and
supervised by the Financial Services Authority (OJK). Although the contents of this document may represent the opinion of PT. Mandiri Sekuritas, deriving its
judgement from materials and sources believed to be reliable, PT. Mandiri Sekuritas or any other company in the Mandiri Group cannot guarantee its
accuracy and completeness. PT. Mandiri Sekuritas or any other company in the Mandiri Group may be involved in transactions contrary to any opinion herein
to make markets, or have positions in the securities recommended herein. PT. Mandiri Sekuritas or any other company in the Mandiri Group may seek or will
seek investment banking or other business relationships with the companies in this report. For further information please contact our number
62-21-5263445.

ANALYSTS CERTIFICATION: Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her views about the
companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not and will not be
influenced by any part or all of his or her compensation.