We expect that President Joko Widodo’s cuts to fuel subsidies will likely impact residential property prices and monthly vehicle sales, although demand should recover after 2Q15 once consumers have adjusted. This initial dip in consumption may hurt firms such as PT Astra International. While the cut was not a surprise because President Jokowi had pledged during his election campaign to reduce subsidies, this should help soothe some investor concern about his ability to pursue reforms. We note that the move will give him savings of IDR110-140tn rupiah but this is nowhere close to the IDR1,300tn extra he needs annually for initiatives to improve Indonesia's dilapidated infrastructure.18 Nov
13 Nov 2014
A major onslaught of supply in Iskandar is distorting the market. With prices having reached Kuala Lumpur levels, some developers are scaling back their plans but a handful such as Country Garden are resistant to doing so.