Global Market Highlight
DJIA rose by +0.04% on Friday (11/06) followed by S&P 500 (+0.19%) and Nasdaq (+0.35%). Wall Street slightly increase which is caused by the market's focus on consumer price data released last Thursday. And investors are waiting for the Fed's policy regarding its benchmark interest rate this week. On the other hand, Wall Street was supported by the strengthening of most sectors led by Technology, Consumer Services and Consumer Goods sectors. The market will look forward to several data releases today, such as: 1) US Consumer Inflation Expectation; 2) Euro Area Industrial Production; 3) Japan Industrial Production YoY.
Domestic Update
• Indonesia Ministry of Industry announced the extension of 100% luxury tax discount (PPnBM) for automobiles with the capacity below 1.500 cc to August 2021 from previously up until May 2021. MNCS Comment: We believe this would be a positive catalyst for the market and stocks in the sector. Extending the luxury tax discount for automobiles is expected to boost car sales in the coming months on top of continuously lowering the bank's interest rate for auto ownership and BI policy to lower down payment (DP) to 0%. As of May 2021, total automobile wholesalers have reached 320,749 units (42.8% FY21 target & +29.17% YoY). However we expect automobile sales to remain below 1 million units as in 2019.
• Furthermore, there was an addition of 2,769 new Covid-19 cases in Jakarta yesterday.
Company News
1. BBRI IJ targets micro-enterprises to contribute 45% to BRI's total loan disbursement by 2025. BRI's loan disbursement in 1Q21 was IDR914.19 trillion with MSME loan portion reaching 80.6% of the total loan portfolio. In 1Q21 BRI was able to disburse micro loans of IDR360 trillion, up 12.43% YoY or contributed 40% of total loans (CNBC Indonesia). MNCS Comment: We believe that BBRI will continue to be committed to developing micro and ultra-micro businesses supported by synergies through institutions such as Pegadaian and PNM which are targeted to run on Sep-2021. BBRI is trading at 19.33x/2.75x PE/PBV.
2. PPRO IJ will focus on developing and completing a number of ongoing projects by launching landed housing projects in Semarang and Bandung. In addition, PPRO will also continue the completion of its hotel in Lombok and also the construction of a shopping center. PPRO prepares capital expenditure of IDR439 billion in FY21E and targets marketing sales of IDR1.3 trillion (Kontan). MNCS Comment: PPRO's strategy in developing landed houses is expected to be able to improve PPRO's performance. Treaded houses are a type of property that is in high demand at this time. PPRO is currently trading at 1,309.58x/1.32x PE/PBV.
3. HRUM IJ will focus on the Chinese market because it sees demand in the region is still high and is an opportunity for the company to improve performance. In 1Q21 80% of the company's total sales were directed to the Chinese market. Then other markets are Thailand at 8%, Bangladesh at 7%, India at 3%, and Pakistan at 2% (Bisnis Indonesia). MNCS Comment: We agree that China is still the demand driver for coal despite their goal of clean energy in around 2030. We see that China is still relying on coal along with the recovery. Currently HRUM is trading at 14.29x/2.60x PE/PBV levels.
IHSG Updates
JCI fell by (-0.20%) to 6,095.50 on Friday (11/06) while followed by a net foreign buy reaching IDR2.62 trillion. JCI declined along with the weakening of the majority stock exchange in Asia. Various sectors strengthened, led by tech (+5.70%), energy (+3.25%), and transport (+1.49%). On the other hand, finance and industrial fell. JCI weakened due to the increase in daily infection cases of covid, and tapering sentiment by the fed. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,189. We estimate JCI will move the range of 6,050-6,120 while waiting for Balance of Trade data release. Today's recommendation: BRIS, WEGE, TINS, SMRA.
Corporate Action
Public Expose: BBMD
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