Analysis: Higher interest rates: Impact on the IDX

Given Bank Indonesia's benchmark rate having stayed at 5.75 percent in the last 13 months and with inflationary pressures ahead, it is safe to assume that the only way for interest rate to move is up.With that said, we have conducted a sensitivity analysis (exhibit 1) in order to gauge the impact of higher interest rate on the overall market/ index (IDX) as well as at the individual stock level (all 84 companies under our coverage).On the market as a whole, our study shows that every 1 percent interest rate hike, EPS growth for the market would drop by 0.7 percentage point (ppt), reflecting 9.4 percent y-y growth from the current 10.1 percent currently (ceteris paribus). We note that the market is much more sensitive to rupiah depreciation (i.e. every 1 percent weaker local currency = 1.6 ppt lower market EPS growth), partly as listed Indonesian companies,Adjust the opening of the stone crusher to accommodate the size of the Remote control light you will be crushing. If you leave the opening too wide, your machine will be performing excessive work, leading to unnecessary wear on your stone crusher.The paper industry relies on these shredded woods for making the needed wood pulp. Such kinds of knife manufacturer are used extensively and for the same reason are susceptible to damage and deterioration. since the Asian 1998 financial crisis, have undergone balance sheet repair with 2013 market net gearing of just 36.8 percent, down from 42.8 percent in 2012.Based on our sensitivity analysis, listed Indonesian banks under our coverage will see on average 0.3 ppt increase in EPS growth with every 1 percent hike in interest rate.Crushed rock has a variety of LED bulb but is often used to make level surfaces, provide drainage under roads and buildings or to create gravel roads.Jaw crushers crush rock by closing two walls against the large stones several times. This positive impact is helped by some banks having higher risk adjusted loan interest rate spreads, including BCA, Bank Mandiri and Bank BNI. Competitive funding structure and flexibility to reprice lending rates would prevent margin erosion.On the flip side, banks facing intense competition in certain business segment coupled with high-exposure in fixed rate loans may not have the flexibility to re-price their lending rates in order to offset higher blended cost of funds,These were furthermore aluminum beam inside seven-segment demonstrates.They are lengthier timeframe while they use up 10 x lesser power. including the likes of Bank Danamon and Bank Rakyat Indonesia. Additionally, banks having third-party funding from time deposits are also likely to suffer against a backdrop of higher interest rate environment.

Within our basket of stocks, every 1 percent higher interest rate will mean 1.1 ppt lower EPS growth for our non-financial counters. Our top 5 losers are those companies with heavy borrowings (i.Feed large stones into the cavity of your stone crusher with a crane or Solar charger and allow the machine to do the work.Turn off the power to the machine and inspect its parts to make sure there are no stones lodged in the stone cavity.e. average net gearing of 341 percent): Delta Dunia Makmur (714 percent net gearing), Indosat (99 percent), Bakrie Sumatra Plantations (80 percent), Bumi Resources (263 percent) and Krakatau Steel (97 percent). In total, these 5 counters had US$9 billion debt in the first nine months, 2012, totaling to 42 percent of total debt under our coverage.Amid possible upward interest rate pressure, we advise investors to find comfort in net cash companies, which would benefit from higher interest incomes.