Global Market Highlight
DJIA decreased by -0.57% on Friday (15/01) followed by S&P 500 (-0.72%) and Nasdaq (-0.87%). Stocks fell even after President-elect Joe Biden unveiled a USD1.9 trillion Covid-19 relief plan. On the other hand, the December retail-sales report came in weaker than expected with the Covid-19 pandemic’s continued effect on the economy. Subsequently, bank stocks fell after kicking off earnings season. Moreover, the market will look forward to several data releases today, such as: 1) China GDP Growth Rate; 2) China Retail Sales; 3) China Unemployment Rate.
Domestic Update
• BI released Indonesia's trade balance in December 2020 which posted a surplus of USD2.10 billion. The trade balance continues the surplus that has occurred since May 2020. Overall in 2020 the trade balance was a surplus of USD21.74 billion, much higher than the achievement in 2019 which had a deficit of USD3.59 billion.
• BI released Indonesia's external debt position in November 2020, which was recorded at USD416.6 billion. External debt consists of public sector external debt (Government and Central Bank) of USD206.5 billion and private sector external debt (including state-owned enterprises) USD210.1 billion. Indonesia's external debt growth at the end of November 2020 was recorded at 3.9% YoY.
• Furthermore, there was an addition of 3,536 new Covid-19 cases in Jakarta yesterday.
Company News
1. KRAS IJ record an increase product sales in the form of hot rolled coil (HRC) by 19.11% YoY to 1.04 million tonnes FY20 (vs 876,186 tonnes FY19). The company also recorded an increase in the sales volume of cold rolled coil (CRC) products by 17.53% YoY to 405,742 tonnes FY20 (vs 345,237 tonnes FY19). In addition, the sales volume of profile steel products increased by 70.11% YoY to 34,444 tonnes FY20, (vs 20,248 tonnes FY19) (Investor Daily). MNCS Comment: We hope that the increase on sales volume would affect KRAS financial performance as KRAS has been suffering losses. Currently KRAS is trading at -27.49x/2.21x PE/PBV.
2. KAEF IJ is rated idAA- from PEFINDO for the 2018 Phase II Medium Term Notes (MTN) of IDR600 billion which will mature on March 15, 2021. KAEF plans to pay off the 2018 Phase II MTN using the company's internal funds, where in FY20 it was recorded at around IDR1.2 trillion (Emitennews). MNCS Comment: We see that KAEF managed to keep their DER at a manageable level of 1.14x and maintain a good rating. KAEF is currently trading at 632.70x/-4.61x PE/PBV.
3. ADHI IJ received an auction for a government cooperation project with a business entity for the construction package for the construction of the Sumatran eastern highway in Riau Province. The project uses an availability payment scheme or payment based on service availability. ADHI will spend an investment value of around IDR525 billion with operational costs reaching IDR389 billion. The cooperation period specified in the project is 15 years, namely 3 years of construction and 12 years of service (Bisnis). MNCS Comment: The achievement of this project is quite good as a step for ADHI to get further tenders. ADHI must also be prepared, because there will be quite a lot of infrastructure tenders in 2021. ADHI is trading at the level of 324.63x/1.20x PE/PBV.
IHSG Updates
JCI fell by -0.85% to 6,373.41 on Friday (15/01) although followed by net foreign buy reaching IDR49.8 billion. JCI was still continuing the weakening that occurred on the previous day. Only the property sector was able to strengthen while other sectors weakened. We see that it is quite reasonable for JCI to experience a healthy correction after a significant rally in several days.. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,020. We estimate JCI will move in the range of 6,300 – 6,460 while waiting for motorbike sales data release. Today's recommendation: CPIN, PGAS, BBRI, GIAA.
Corporate Action
RUPS: AGRS
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