Global Market Highlight
DJIA surged by +1.85% on Friday (05/03) followed by S&P 500 (+1.95%) and Nasdaq (+1.55%).Wall Street rebounded as the rise in bond yields steadied while a stronger-than-expected jobs report boosted optimism for a faster economic recovery. Moreover, the market will look forward to several data releases today, such as: 1) US Wholesales Inventory; 2) US Consumer Inflation Expectations; 3) Japan Current Account.
Domestic Update
• BI released Indonesia's foreign exchange reserves at the end of February 2021 amounting to 138.8 billion US dollars. The position of foreign exchange reserves is equivalent to financing 10.5 months of imports and is above the international adequacy standard of around 3 months of imports. This increase was driven by the withdrawal of government loans and tax revenues.
• Furthermore, there was an addition of 1,437 new Covid-19 cases in Jakarta yesterday.
Company News
1. GOOD IJ recorded a sales growth of 8.1% YoY in Jan-2021. The sales growth was contributed by several new products, namely Garuda Potato and Garuda O'Corn, with a contribution of up to 20% of total sales (Investor Daily). MNCS Comment: Government stimulus followed by cooperation through several strategic partners in the chocolate snack and dairy products sector is expected to be able to encourage better GOOD sales in FY21E. Currently GOOD is trading at 41.13x/4.60x PE/PBV.
2. INDY IJ prepares a fund of USD500 million to carry out a power project through a joint venture company with Fourth Partner Energy which is expected to be completed in the next 4 years (Bisnis Indonesia). MNCS Comment: It's a very good strategy for INDY to expand it's power plant as previously INDY already has 2 power plants with 1,660 MW capacity in Cirebon. INDY is currently trading at 0.68x PBV.
3. ADHI IJ together with Korea Water Resources Corporation (K-Water) will create a Karian-Serpong (East) Drinking Water Supply System (SPAM) project and have formed an implementing business entity PT Karian Water Services. SPAM Karian-Serpong (East) is part of the National Strategic Project (PSN) with a clean water supply capacity of 4,600 liters per second, which is expected to serve 386,000 house connections (SR) (Kontan). MNCS Comment: This consortium is expected to be able to optimize the realization of PSN development. This is also a good strategy to help ADHI's balance sheet, which is quite challenging for Covid-19 in FY20. ADHI is trading at 229.15x/0.84x PE/PBV.
IHSG Updates
JCI dropped by -0.51% to 6,258.75 on Friday (05/03) followed by net foreign sell reaching IDR957.06 billion. JCI still weakened due to a drop in commodity prices which has caused commodity stocks to fall, leaving the finance sectors the only one increasing. Meanwhile, the Rupiah exchange rate was weakening at IDR14,300. We estimate JCI will move in the range of 6,250-6,320 while waiting for balance of trade data release. Today's recommendation: HMSP, AKRA, WSKT, BMRI.
Corporate Action
IPO: UNIQ (IDR118/share)
RUPS: ARNA
Rights Issue Cum Date: MAYA (IDR400/share)
Disclaimer On
