MNCS Morning Navigator

07 Januari 2021

MNCS Morning Navigator 07 January 2021

Global Market Highlight
DJIA increased by +1.44% on Wednesday (06/01) followed by S&P 500 (+0.71%) while Nasdaq dropped (-0.61%). The US stock market rally came as a result from the runoff election in Georgia rolled in. This victory comes as a surprise in Republican-dominated territory, which will give them control of Congress and the power to support Joe Biden's policies. The Democratic-controlled Senate is pushing for an increase in fiscal stimulus. This will bring positive sentiment for global economic growth. Moreover, the market will look forward to several data releases today, such as: 1) US Balance of Trade; 2) US Initial Jobless Claims; 3) Eurozone Core Inflation Rate.

Domestic Update
• Government tightens PSBB in Java and Bali due to higher Covid-19 cases that will take effect from 11 to 25 January 2021 and will be carried out on a micro level. Several tightening restrictions are as follows: 1) limiting workplaces with 75% WFH; 2) online teaching and learning activities; 3) essential sectors continue to operate 100% by maintaining strict health protocols; 4) limiting shopping centers operational hours until 19.00 local time; 5) public facilities and socio-cultural activities are temporarily suspended.
The Ministry of Finance noted that the realization of state spending throughout 2020 reached IDR2,589.9 trillion or 94.6% of the ceiling set by the government.
Furthermore, there was an addition of 2,402 new Covid-19 cases in Jakarta yesterday.

Company News
1. MTDL IJ explores business opportunities in the e-sport and gaming segment through its subsidiary PT Synnex Metrodata Indonesia to become the official distributor of Razer Gaming Gear & Peripherals products from Razer. MTDL will distribute cell phone hardware and accessories, including gaming mouse, keyboards and audio products (IQ Plus). MNCS Comment: We see that the gaming market in Indonesia still has good potential, supported by the development of digital entertainment. The collaboration with Razer as a distributor of gaming products will strengthen the MTDL business portfolio going forward. Currently, sales of hardware products contribute 76.72% of total revenue. MTDL is currently traded at 10.87x/1.70x PE/ PBV.
2. HEAL IJ has carried out a private placement that issued five million shares with a total value of IDR20 billion. HEAL admitted that these funds would be used for the company's working capital needs and capex budget (Emitennews). MNCS Comment: The plan is quite appropriate amidst the increasing need for capital turnover along with high hospital occupancy due to exposure to Covid-19 which continues to grow at this time. HEAL is currently traded at 32.81x/4.84x PE/PBV.
3. PTBA IJ signs activated carbon HoA in spirit to push for downstream industries. PTBA signed a heads of agreement (HoA) with Activated Carbon Technologies PTY Ltd. (ACT), an activated carbon producer and supplier, based in Australia. PTBA plans to build a plant at the Bukit Asam Coal-Based Industrial Estate (BACBIE) in Tanjung Enim to annually produce 12,000 tons of activated carbon by processing 60,000 tons of coal per year (Kontan). MNCS Comment: Other than gasification, PTBA managed to secure another downstreaming project which is beneficial for the company in the long run. PTBA is currently traded at 11.98x/1.96x PE/PBV.

IHSG Updates
JCI dropped by -1.17% to 6,065.68 on Wednesday (06/01) followed by net foreign sell reaching IDR698.48 billion. JCI fell while all sectors weakened following the news of PSBB retightening on Java-Bali, as Covid-19 cases rose in these areas. Meanwhile, the Rupiah exchange rate was strengthening at IDR13,895. We estimate JCI will move in the range of 5,911 – 6,195 while waiting for foreign exchange reserves data release. Today's recommendation: WSBP, KAEF, ACES, BBKP

Corporate Action

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