POSITIVE; JCI target 6,900

We maintain our POSITIVE view on the market as the overall macro situation should continue to gradually improve in 2021. Our end-2021 JCI target of 6,900 is based on 21.8x PER, 2SD above its 10-year mean. Higher valuations are justified given structural changes in the economy. Foreign fund inflows are likely due to 1) foreign investors’ low exposure to Indonesia’s equity market; and 2) potential hunt for yields by global investors. We like sectors with exposure to economic recovery, FDI and nickel. Our Top Picks are: AKRA, ASII, BJBR, BMRI, ICBP, INCO, KLBF, MAPI, PGAS, PWON, SMGR and UNTR .

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