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In the previous newsletter , we were introduced to the stock scanner and stock screener features that help find companies with good fundamentals. However, apart from knowing the company and understanding its work cycle, it is also important for investors to learn about the industry sector in which the company operates. Therefore, industry analysis is very necessary in analyzing the company's prospects.
The nine industrial sectors listed on the Indonesia Stock Exchange (IDX) have their own criteria and industry driving factors. Investors cannot equate the prospects of one stock with other stocks operating in different industries. Therefore, let's take a deeper dive into each of the above sectors listed on the IDX.
Agriculture
Agriculture has several sub-sectors, namely food crops, plantations, livestock, and fisheries. The movement of the agricultural sector on the IDX is more influenced by issuers in the plantation sub-sector because the movement is liquid and has a high market capitalization. Examples of issuers of this sub-sector are Astra Agro Lestari Tbk (AALI), Eagle High Plantation Tbk (BWPT), and PP London Sumatra Indonesia Tbk (LSIP).
Issuers of the plantation sub-sector are influenced by developments in world palm oil prices ( crude palm oil ), weather conditions, harvest times and government regulations related to the industry.
Mining Mining
sub-sectors include coal, oil and gas, metals and minerals, and rock mining. Issuers in the mining industry that are frequently observed are Adaro Energy Tbk (ADRO), Indo Tambangraya Megah (ITMG), and Bukit Asam Coal Mine (Persero) Tbk (PTBA).
Issuers in the mining industry are strongly influenced by commodity prices, namely the price of coal, nickel, oil, and regulations related to these industries.
Basic and Chemical
Industry This industry has various sub-sectors in it, namely cement, ceramics, porcelain and glass, metals, chemicals, plastics and packaging, animal feed, wood, and pulp and paper sub-sectors.
Issuers included in this industry include Wijaya Karya Beton Tbk (WTON), Aneka Gas Industri Tbk (AGII), and Indah Kiat Pulp & Paper Tbk (INKP). Each sub-sector has different industry criteria so that the factors that affect the performance of companies in the sub-sector are also different.
Miscellaneous Industries
This industry consists of sub-sectors of machinery and heavy equipment, automotive, textiles, footwear, cables, and electronics. Issuers that are frequently traded in this industry include Garuda Maintenance Facility Aero Asia Tbk (GMFI), Astra International Tbk (ASII), and Sri Rejeki Isman Tbk (SRIL).
The rupiah exchange rate is a factor that affects textile issuers such as SRIL. While ASII is a group of companies consisting of various industries in it, including plantations, automotive, finance, and others.
Consumer Goods The
consumer goods industry consists of the food and beverage, cigarette, pharmaceutical, cosmetic, and household appliances sub-sectors. Examples of issuers of the consumer goods industry that are listed on the stock exchange include Indofood CBP Sukses Makmur Tbk (ICBP), Gudang Garam Tbk (GGRM), Kalbe Farma Tbk (KLBF) and Unilever Indonesia Tbk (UNVR).
Products produced by issuers in this industry are products that are needed by the community. Issuers that are included in this industry are also referred to as defensive stocks because the performance of the issuer is not heavily influenced by economic conditions. Factors that can affect the performance of issuers in this industry are people's purchasing power. Meanwhile, cigarette issuers are also affected by excise prices.
Property, Real Estate, and Building Construction
Issuers included in this industry are Alam Sutera Reality Tbk (ASRI), Adhi Karya Tbk (ADHI), and PP (Persero) Tbk (PTPP).
Factors affecting the property sub-sector include people's purchasing power, bank interest rates, and banking policies such as easing down on downpayment for property.
Meanwhile, the factors that affect the construction sub-sector include the amount of government budget allocation, the smooth running of projects, and the value of the contracts obtained.
Infrastructure, Utilities, and Transportation
Issuers that are often observed in this industry are Jasa Marga (Persero) Tbk (JSMR), telecommunication sub-sector issuers such as Telekomunikasi Indonesia Tbk (TLKM), and Garuda Indonesia (Persero) Tbk (GIAA).
Factors that affect the industry engaged in toll road management (JSMR) are the number of toll road construction contracts and the flow of cars on toll roads. In telecommunications, intense industry competition and government regulations can also affect the performance of issuers. For Garuda Indonesia (Persero) Tbk (GIAA), the influencing factors are the price of aviation fuel and the number of tourist arrivals.
Finance
Issuers in the financial industry are dominated by banks. Bank Central Asia Tbk (BBCA) and Bank Rakyat Indonesia (Persero) Tbk (BBRI) are examples of banking issuers. Issuers of banking are closely related to the state of the global economy as well as a country. Global economic conditions and a weakening country could potentially reduce banking performance.
The next factor is the policy of the central bank (Bank Indonesia), such as changes in the minimum statutory reserve requirement and lower interest rates. A decrease in the central bank's interest rate can result in a decrease in the bank's own interest rate so that the bank's income from interest will decrease. However, on the positive side, lower interest rates will serve as a stimulus to increase the number of lending by banks to customers.
Service Trade and Investment
This industry consists of the retail trade sub-sector and the wholesale trade sub-sector. Supermarkets or markets that sell household products, clothing, and other daily necessities are a sub-sector of retail trade. Several issuers in retail trade include Matahari Department Store Tbk (LPPF) and Ramayana Lestari Sentosa Tbk (RALS). Factors that affect issuers in this sub-sector are people's purchasing power and industrial cycles such as holidays or the turn of the year.
There are many types of industries in the Capital Market, so understand it well before buying!
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