Despite China's Crisis, Several Property Stocks Strengthen in Indonesia

China's property sector is experiencing a crisis, as evidenced by the case of Country Garden, a Chinese property company that defaulted on its bond coupon payments in early August 2023.

According to data compiled by *The New York Times*, in July 2023, cumulative new home sales from the 100 largest Chinese property companies fell by 33% year-on-year (YoY). This decline in performance has also sparked concerns among investors.

"The fear (of the property crisis in China) has spread to other markets, such as Hong Kong, where many of China's largest companies are listed," said the *New York Times* editorial staff in its report on Monday (August 21, 2023).

"Investor confidence (on the Hong Kong Stock Exchange) has plummeted, causing (Chinese company) stocks to fall into a bad state, down 21% from their peak in January 2023. In the past two weeks, investors (on the Hong Kong Stock Exchange) have withdrawn US$7.5 billion from Chinese company stocks," it continued.

However, a different situation seems to be occurring in Indonesia. The share prices of several domestic property issuers have actually strengthened over the past eight months.

*Databoks* monitored the share price movements of several large-cap property issuers in Indonesia. Of the 15 property issuers monitored, 9 saw their share prices strengthen, 2 remained stagnant, and 4 weakened.

The biggest strengthening was experienced by PT Ciputra Development Tbk (CTRA). On January 2, 2023, the CTRA share price was at Rp920. By the close of trading on August 25, 2023, it had reached Rp1,135. Cumulatively, the CTRA share price has strengthened by 23.37% year-to-date (YTD).

Significant strengthening was also experienced by PT Jaya Real Property Tbk (JRPT), PT Bumi Serpong Damai Tbk (BSDE), PT Lippo Karawaci Tbk (LPKR), PT Duta Pertiwi Tbk (DUTI), and PT Alam Sutera Realty Tbk (ASRI), with their share prices rising in the range of 15% to 22% (YTD).

Similar increases occurred for PT Puradelta Lestari Tbk (DMAS), PT Summarecon Agung Tbk (SMRA), and PT Pakuwon Jati Tbk (PWON), although the increase in their share prices was below 10% (YTD).

Meanwhile, the share prices of PT Sentul City Tbk (BKSL) and PT Lippo Cikarang Tbk (LPCK) remained stagnant. The deepest weakening was experienced by PT Metropolitan Kentjana Tbk (MKPI), whose share price fell by 31.55% (YTD).

A milder contraction occurred for PT Agung Podomoro Land Tbk (APLN), PT MNC Land Tbk (KPIG), and PT Jaya Sukses Makmur Sentosa Tbk (RISE), with the percentage decrease in share prices as shown in the graph.

According to Syarifah Syaukat, Senior Research Advisor at Knight Frank Indonesia, the property sector crisis in China has not directly impacted Indonesia.

"The Indonesian property market is largely dominated by the domestic market. If the dominance is domestic, we may not experience a direct impact (from the Chinese property crisis), but rather a downstream impact," said Syarifah, as reported by *Bisnis.com* on Thursday (August 24, 2023).

Business Development Director of Knight Frank, Martin Wijaya, echoed this sentiment. He even sees Indonesia as having the potential to benefit from this situation.

"If we talk specifically about the property sector, there is actually an opportunity for a positive impact. Investors from China will invest here, especially in hotels this year. So there is no direct impact, but the effects may have been present since two years ago," said Martin, as reported by *Bisnis.com* on Thursday (August 24, 2023).