KONTAN.CO.ID - JAKARTA. The price-earnings ratio (PER) of state-owned bank issuers' shares is below the average of  IDX Composite's PE ratio. The IDX Composite PER itself at the close of trading last week was 15.5 times.

Four state-owned banks are having a PE ratio below PER IDX Composite. They are PT Bank Mandiri Tbk (BMRI) with a PE ratio of 13.2 times, and PT Bank Rakyat Indonesia Tbk (BBRI) of 15.1 times. Besides them, there are also PT Bank Negara Indonesia Tbk (BBNI) with PE 11.2 times and PT Bank Tabungan Negara Tbk (BBTN) of 8.6 times.

These banks showed good financial performance in 2018. BBRI's profit grew 14.6%, BMRI's profit rose 21.2%, and BBNI's profit grew 10.3%.

According to Analyst at Phintraco Sekuritas Valdy Kurniawan, last year the prices of the state-owned bank shares fell quite deep. The weakening was mainly due to severe global and domestic conditions, including aggressive growth of interest rates and sharply volatile rupiah exchange rates.

If we look at the PER above, the shares of the banking sector are already relatively cheap and have the potential to strengthen. "Their performance is relatively good, above the banking sector in Indonesia," Valdy told Kontan.co.id, Monday (3/18).

This year the interest rate and rupiah exchange rate policy will be much better and more stable compared to 2018. If last year, when conditions were quite heavy, bank shares could still go up, certainly in better conditions this sector's stocks could be better.

Valdy recommends buying BBRI with a reasonable target price of IDR 4,110 per share. The target price of BMRI is Rp 8,300 per share, and BBNI is Rp 12,600 per share.

Editor: Hasbi Maulana