MNCS Morning Navigator

11 Januari 2021

MNCS Morning Navigator 11 January 2021

Global Market Highlight

DJIA increased by +0.18% on Friday (08/01) followed by S&P 500 (+0.55%) and Nasdaq (+1.03%). Wall street was closed at records for a second day in Friday as investors assessed expectations for more economic stimulus following a weaker-than-expected US jobs report. A senator opposed providing Americans with USD2,000 stimulus checks, creating an obstacle for President-elect Joe Biden's push to boost stimulus measures. Biden has vowed that larger relief checks would be delivered to Americans if the Democrats won the Senate runoff elections in Georgia, which they did earlier this week. Moreover, the market will look forward to several data releases today, such as: 1) US Consumer Inflation Expectations; 2) China Inflation Rate; 3) China PPI.


Domestic Update

• Bank Indonesia released foreign exchange reserves at the end of December 2020 amounting to USD135.9 billion. This figure is an increase compared to the position at the end of November 2020 amounting to USD133.6 billion. The position of foreign exchange reserves is equivalent to financing 10.2 months of imports or 9.8 months of imports and servicing of government external debt, and above the international adequacy standard of around 3 months of imports. Bank Indonesia assesses that the foreign exchange reserves are capable of supporting external sector resilience and maintaining macroeconomic and financial system stability.

• The Ministry of Public Works and Public Housing (PUPR) prepares the PKT budget for 2021 to absorb a workforce of 777,206 of IDR12.06 trillion. It is hoped that the benefits can directly contribute to the National Economic Recovery (PEN) program after the Covid-19 Pandemic.

• Furthermore, there was an addition of 2,711 new Covid-19 cases in Jakarta yesterday.


Company News

1. UNTR IJ budgeted a capital expenditure of USD290 million, equivalent to IDR4.09 trillion in 2021. As much as 50% of the capital expenditure budget will be allocated for the mining contractor business, which is mostly used for heavy equipment replacement. About 40% of the budget is used for gold mining to finance the development of processing plant facilities, operational improvement projects and improvement of tailings storage facilities, as well as routine maintenance. As for the source of funding for capital expenditures, the company plans to come from internal cash (Investor Daily). MNCS Comment: We see that UNTR is now focusing more on the metal mining rather than weighing heavily on the heavy equipment business. Whereas this will be beneficial for UNTR considering the ever increasing gold price. UNTR is currently traded at 14.29x/1.69x PE/ PBV.

2. KAEF IJ allocates a capital expenditure of IDR500 billion this year or almost the same as last year's budget of IDR547 billion. The company seeks to keep the investment budget efficient amid the Covid-19 pandemic (Investor Daily). MNCS Comment: KAEF is trying to keep the budget efficient in the midst of a pandemic.  One of the KAEF strategies that will be implemented this year is the construction of a paracetamol factory. KAEF is currently traded at 601.91x/4.38x PE/PBV.

3. MDKA IJ received an idA rating from PT Pemeringkat Efek Indonesia (Pefindo). The rating is affirmed from the previous rating and applies to Obligasi Berkelanjutan I Year 2020. Not only that, Pefindo also provides a stable prospect for Merdeka Copper Gold (Kontan). MNCS Comment: This is a positive sentiment which we hope will further boost MDKA's financing. MDKA is currently traded at 51.31x/7.19x PE/PBV.


IHSG Updates

JCI rose by +1.69% to 6,257.84 on Friday (08/01) followed by net foreign buy reaching IDR1.63 trillion. JCI continues the hike, backed by miscellaneous, basic and infrastructure sectors. ASII became one of the contributors to JCI despite the drop on car sales in FY20. Meanwhile, the Rupiah exchange rate was weakening at IDR14,020. We estimate JCI will move in the range of 6,200 – 6,300 while waiting for balance of trade and consumer confidence data release. Today's recommendation: GIAA, PTBA, PGAS, INCO.


Corporate Action



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