Global Market Highlight
DJIA dropped by -0.29% on Monday (11/01) followed by S&P 500 (-0.66%) and Nasdaq (-1.25%). Wall street closed lower as investors weigh on the political tension in the US. Meanwhile, Biden is expected to lay out his multi-trillion stimulus plan as well as another round of larger stimulus checks, state and local aid and funds for vaccine distribution that are also expected to form part of the relief package. Moreover, the market will look forward to several data releases today, such as: 1) US Redbook; 2) Japan Current Account; 3) Italy Retail Sales.
Domestic Update
• The Food and Drug Administration (BPOM) released a permit for the emergency use of the Covid-19 vaccine. The vaccine Sinovac with the name CoronaVac officially receives EUA or Emergency Use Authorization. According to the BPOM, the Covid-19 CoronaVac vaccine is safe while side effects are mild and moderate. The vaccine efficacy is 65.23% in Indonesia.
• Bank Indonesia released the Consumer Survey in December 2020 at 96.5, an increase from 92.0 in November 2020. This figure indicates that consumer confidence in economic conditions is strengthening, approaching the optimistic zone. Improved consumer confidence in December 2020 was driven by a strengthening perception of the current improving economic conditions supported by aspects of job availability, income, and timeliness of purchasing durable goods. Meanwhile, consumer expectations of future economic conditions have increased, particularly in terms of job availability.
• Furthermore, there was an addition of 2,461 new Covid-19 cases in Jakarta yesterday.
Company News
1. BNGA IJ introduces the latest mobile banking application for corporate customers, namely BizChannel@CIMB Mobile; a development of the previous corporate internet banking service. The presence of the application is expected to answer the needs of corporate customers in the digital age who want to be practical and fast to support their businesses. The apps will be carry out various financial activities with a safe and comfortable experience (IQ Plus). MNCS Comment: Through the apps, BNGA offers a convenience transaction that can be enjoyed by corporate customers such as SME, commercial banking and corporate banking segments. As of 9M20, monthly transaction volume on BizChannel internet banking grew by 9.8% YoY. BNGA is trading at 10.16x/0.63x PE/PBV levels.
2. SRIL IJ intends to raise USD325 million from a global bonds issuance through its subsidiary. The proceeds will be used to refinance debt and fund business expansion. Moody's Investors Service has assigned a B1 to the previous USD150 million global bond that reflects the risk of its USD350 million syndicated loan maturing in Jan-2022 amid difficult market condition (Kontan). MNCS Comment: SRIL still has a manageable DER level at 1.62x. We believe that the management will continue to focus on better liquidity and capital structure in FY21E. Higher demand on garment segment such as mask and hazmat suit (provides 18%-35% GPM) will boost its performance. SRIL is currently trading at 3.73x/0.56x PE/PBV.
3. CTRA IJ posted pre-sales revenue (marketing sales) throughout 2020 of IDR5 trillion. This income is still dominated by the first home buyer segment. Marketing sales decreased by 10% compared to 2019, which was valued at IDR6.1 trillion (Kontan). MNCS Comment: We consider the decline in CTRA's marketing sales to be quite reasonable, due to people refraining from buying property amid the pandemic. CTRA is trading at the level of 61.45x / 1.29x PE / PBV.
IHSG Updates
JCI rose by +2.00% to 6,382.94 on Monday (11/01) followed by net foreign buy reaching IDR2.74 trillion. JCI rallied to open this week's trade which is backed by pharmaceutical stocks following the vaccination that will be carried out on Wednesday as well as the vaccine approval from BPOM. Meanwhile, the Rupiah exchange rate was weakening at IDR14,125. We estimate JCI will move in the range of 6,200 – 6,400 while waiting for balance of trade and consumer confidence data release. Today's recommendation: INDY, EXCL, BRPT, LPKR.
Corporate Action
RUPS: DNAR, PLAS
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