Publication

PEFINDO is of the view that the outlook for Indonesia’s airline sector is negative, as the industry faces mounting cost pressures from prolonged geopolitical tensions and continued rupiah depreciation against the US dollar. Elevated and volatile jet fuel prices, together with the sector’s significant exposure to US dollar-denominated costs, are expected to pressure operating margins and cash flow generation. These pressures could further expose the industry’s structurally weak financial resilience, characterized by thin profitability, high fixed costs, and limited financial flexibility. ...

PEFINDO views that outlook for the pulp and paper sector as remain stable in the near to medium terms with the risk profile is considered as moderately high. The demand expansion will positively affect the pulp industry as the main raw material for paper packaging and tissue products. The growth in demand is largely driven by increasing use of paper-based packaging and tissue, as many countries are becoming more concerned about environmental issues such as global warming, biodegradability, and health risks associated with plastic packaging. In addition, the heightened demand for hygiene-related products since the Covid-19 pandemic has further benefited the tissue segments. On the other hand, we anticipate the demand of paper used in newsprint, printing, and writing – some of the main derivative products of pulp - has experienced negative growth in recent years due to ongoing digitalization. In the near term, geopolitical tensions have also affected the global economy, particularly through higher energy costs following significant increases in fuel prices, which in turn may hamper the demand of global commodities, including pulp and paper products. Nevertheless, we also note that the higher oil price might affect the plastic prices, which could improve the relative competitiveness of paper-based packaging as a substitute.   ...

Indonesia's multifinance industry risk profile is considered moderately high with stable outlook in the near to medium term. Our view is supported by relatively resilient consumer demand and continued financing activity across key segments, with players demonstrating adaptability amid evolving market conditions. Financing demand has increasingly shifted toward more affordable segments, reflecting the industry's ability to adjust product offerings and ticket sizes to sustain business volumes amid a more challenging operating environment. ...