Recently there's a news suggest a refocus and reallocation FY21F budget. Market fear that this will give a negative sentiment to infra budget and public works ministry given to their hefty budget this year at Rp149tn.
However, the recent update shows that the reallocation in public works ministry budget this year is at Rp17.9tn. With that said, upside from this sector remain huge as the post reallocation budget is at Rp131tn (+49% yoy).
We expect the sector will benefit from Government spending on infra.While lower deposit rates this year potentially give a better sentiment to similar sector such as property. Hence we maintain our ETF picks for and given to the fact that infra will remain a priority this year and risk-on sentiment where investor prefer riskier sectors. Worth to note that in the same time, SWF is about to launch as the Government is close to naming chief for SWF to boost the economy. (IndoPremier - ETF Desk)
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