Publication

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. ...

PEFINDO views the risk profile for the construction sector as moderately high with a stable outlook over the next 12-18 months, reflecting our expectations that existing order backlogs and ongoing priority projects will continue to support baseline revenue generation. However, weaker new order inflows, elevated execution and cost overrun risks, as well as tight funding conditions, are likely to keep contractors’ cash flow profiles and leverage metrics under pressure, particularly state-owned contractors. As refinancing risks mount ahead of significant debt maturity walls in 2026 as well, the sector’s long-term sustainability will likely depend on aggressive debt-to-equity swaps and consolidation. Therefore, rating headroom likely will remain limited, particularly for issuers with thin liquidity buffers, high working capital needs, and reliance on external refinancing. ...