President Joko Widodo, who is stepping down in 2024, announced higher infrastructure spending of 422.7 trillion rupiah amid plans to move the nation’s capital to Borneo next year. The president, who still enjoys plenty of public support, also unveiled an 8% average increase in civil servants’ salaries to boost domestic consumption.
Producers of building materials will gain from increased infrastructure spending, while costs are lower amid declines in coal prices, said head of research at Mirae Asset Sekuritas Robertus Hardy. Cement maker PT Indocement Tunggal Prakarsa and state-owned PT Semen Indonesia are likely winners in the sector, said RHB’s Wijaya.
Miners with downstream investments will continue to benefit from policies to support Indonesia’s move up the commodities value chain, while restricting exports of raw minerals, according to Andre Benas, head of research at BCA Sekuritas. His top pick is PT Trimegah Bangun Persada, which shipped its first nickel sulfate to China in June.
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