Jakarta, 9 April 2020 --- The Indonesia Stock Exchange has been volatile again after the corona virus pandemic has spread and positive patients are multiplying in the country. Historically this stock market turmoil has occurred in the 2008-2009 period, due to the subprime mortgage crisis in the United States. At that time the Composite Stock Price Index (CSPI) dropped more than 60% from the highs in 2008 of 2,830 to the lows of 1,111. Meanwhile in the year to date 2008, JCI dropped more than 50% to touch 1,355.41 on 31 December 2008.
In line with this, the stock exchange experienced panic. Investors made panic selling, including foreign investors who withdraw funds and a massive outflow occurs. However, for some people the phenomenon turns out to be an opportunity. Especially for those who understand that the condition will not last long and will gradually return to normal.
For example, the shares movement of PT Bank Negara Indonesia (Persero) Tbk (BBNI). In 2008, BNI shares must be thrown from the level of Rp 1,071 per share to touch Rp 393 per share on 24 November 2008. BNI shares were depreciated 72.6% only in 2 months.
This condition continued into 2009, where from the beginning to the middle of the year, BNI shares moved in the range of Rp 600-900 per share. However, after May 2009, BNI shares moved above the level of Rp 1,000 and slowly rose and almost touched Rp 2,000 per share.
Then, BNI shares "recovered" again and moved again in the range of Rp 2,000/share in March 2010, and rose to the level of Rp 3,081/share in August. At the end of 2010, BNI reached the highest level since the crisis hit, which was Rp 4,700/share. This means that since touching the lowest point, BNI shares can increase almost 12 times in just over a period of about 2 years. Simple illustration, if you invest in BNI shares with a value of Rp 100 million in 2008, then your wealth will multiply to more than Rp 1.1 billion in just 2 years.
Corona 2020
The current condition in the stock exchange is not much different from 2008-2009. ICI was depressed and touched its lowest point since 2013, at the close of trading on Monday (23/03/2020) slipped to the level of 3,989. Since the beginning of the year (year to date) ICI was recorded to have fallen 26.56%.
However, the decline in the ICI did not last long, after recording the lowest level, the ICI immediately rose and now, Wednesday (04/04/2020) back at the level of 4,626. Likewise, BNI shares had touched IDR 3,390/share when the ICI left 4,000.
It did not take long for BNI slowly but sure to rise up, and closed at Rp 4,010/share on Wednesday (09/04/2020) yesterday. Increase of more than 20% in just a matter of days.
The capital market observer, Yazid Muammar, said the potential for BNI shares to rebound was among the fastest compared to other large banks. This can be seen from the beta valuation, which is 1.5 times. Besides, the decline of BNI shares has not reached 50% until now, while in 2008, its share decline was more than 75%.
He considers that the current BNI valuation with PBV 0.6 times is cheaper compared to other large banks, especially if you look at the average BNI PBV in the last five years at 1.45%.
PBV is the valuation of share prices with the book value of a company. Usually, shares that have large PBV ratios, have high valuation (overvalue) while shares with PBV below 1 time, have low valuation or undervalue.
"For this reason, now is the right time as a strategy to enter BNI shares, by buying installments. BNI is likely to return to its normal PBV. Because blue chip shares will be targeted by large capital investors and make valuations also increase," said Yazid.
Meanwhile, the Analyst of Profindo Sekuritas, Dimas Wahyu, said that technically BNI is in correction phase, with the direction of decline to the range of Rp 3,450/share as bottom fishing (buy at the lowest price). While the increase is targeted at the resistance level of Rp 4,659/share.
With this BNI share price position, Dimas considers it to be attractive and worth collecting. Although overall the banking sector will experience pressure from net interest income and net profit this year. In contrast to the 2008 crisis, where banks in Indonesia did not hold syndicated property financing or hold US debt securities so that repairs after the crisis took place quickly, this COVID-19 pandemic is not only negative for the banking industry, but also for global economic growth.
"For Asia, only three countries survived, namely China, India, and Indonesia which will still be positive, even though the macro will be tougher," said Dimas.
Although the overall improvement is not as fast as expected, he projects that the Indonesian economy will return to normal in 2021. Because the business world will operate normally, including the banking industry.
For more information, please contact:
Corporate Secretary BNI
Phone: 021-5728387
Email: bni@bni.co.id