Global Market Highlight
DJIA rose by +1.34% on Wednesday (04/11) followed by S&P 500 (+2.20%) and Nasdaq (+3.85%). US stocks soared in reaction to the ongoing tally of votes in the presidential election. Healthcare stocks led the market higher on the prospect of a Joe Biden presidency and a Republican Senate which also led to a spike in fossil-fuel stocks and a drop in green-energy stocks. Tech shares also closed sharply higher. Moreover, the market will look forward to several data releases today, such as: 1) UK BoE Interest Rate Decision; 2) Eurozone Retail Sales; 3) US Initial Jobless Claims.
Domestic Update
The government has decided to continue providing Social Cash Assistance (BST) in 2021. This assistance is one of the social protection programs in the Covid-19 pandemic. Previously, BST was given to 9 million recipients. In the first batch, beneficiaries received BST of IDR600,000 per month, but in the second batch since July the BST received fell to IDR300,000 per month. The future amount has not yet been decided due to the evaluation that needs to be done by the government.
Company News
1. TOWR IJ revenue increased 19.3% YoY to IDR5.55 trillion in 9M20. The positive result driven by increase in 5,269 tenants and 12,244km of fiber optic leases based on long-term contracts. Hence, TOWR managed to book a growth in net income of 19.5% YoY. With these results, the management revised the target annual growth from 9% to 14-15% YoY (Market Bisnis). MNCS Comment: TOWR's brilliant performance is backed by the ever increasing usage of networks. Moreover, it is estimated that TOWR will be included in the next MSCI rebalancing which will gave more positive sentiments so we see that the the target revision is a good strategy. TOWR is currently traded at 19.75x/5.19x PE/PBV.
2. TINS IJ posted fall in revenue by 18.42% YoY to IDR11.88 trillion in 3Q20 due to a decrease in production by 47.44% YoY. Though there is an increase in demand of 8.07% QoQ in 3Q20. Thus, TINS reported a net loss of IDR 255.16 billion in 3Q20, slightly decreased from the same period last year at IDR390.07 billion (Market Bisnis). MNCS Comment: We hope that the future shift towards electric vehicle will drive tin prices further as it will be beneficial for TINS' performance in the future. TINS is currently traded at 1.26x PBV.
3. SMGR IJ reported revenue decrease 8.89% YoY to IDR25.62 trillion in 9M20. The revenue contribution comes 83.73% from cement, followed by 8.56% from slag, 5.24% from precast concrete and 2.1% from others. Despite of revenue decreased, the net income has increased by 19.37% YoY to IDR1.54 trillion in 9M20 (Market Bisnis). MNCS Comment: SMGR has managed to become more efficient as they're expenses drop down significantly, while the increase on bottom line is boosted from gain on foreign exchange. SMGR is currently traded at 26.33x/1.61x PBV.
IHSG Updates
JCI weakened by -1.05% to 5,105.20 on Wednesday (04/11) though followed by net foreign buy reaching IDR7.74 billion. JCI slipped again as investors seem to have done more profit taking. This is because the market is waiting for the US election results which whoever wins will have an impact towards the market. Furthermore, investors also avoid risk upon the upcoming 3Q20 GDP data release which is estimated to be at -1.2%. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,565. We estimate JCI will move in the range of 5,083 – 5,162 while waiting for 3Q20 GDP data release. Today's recommendation: ACES, WSKT, AKRA, JSMR.
Corporate Action
RUPS: BRIS
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