19 Juni 2020
MNCS Morning Navigator 19 June 2020
Global Market Highlight
DJIA movement was flat (-0.15%) on Thursday (18/06) followed by S&P 500 (-0.06%) and Nasdaq (+0.33%). The fall on some indices were due to the release of the US unemployment that reached 1.51 million, below estimates of 1.3 million followed by an increase in Covid-19 cases on Texas and Arizona. However, the rise in some technology stocks namely Facebook, Amazon and Netflix contributed to the slight increase on Nasdaq. Moreover, the market will look forward to several data releases today, such as: 1) Japan Inflation Rate; 2) UK Retail Sales; 3) US Current Account.
Domestic Updates
BI decided to lower the BI 7-Day Reverse Repo Rate (BI7DRR) by 25 bps to 4.25%, the Deposit Facility interest rate by 25 bps to 3.50%, and Lending Facility interest rate of 25 bps to 5.00%. This decision is consistent with efforts to maintain economic stability and encourage economic recovery in the COVID-19 era. Bank Indonesia stated that there is still a possibility to lower interest rates, in line with low inflationary pressure, to maintained external stability, and the need to boost economic growth. The policy of stabilizing the Rupiah exchange rate and easing liquidity (quantitative easing) will continue.
Company News
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JPFA IJ will be distributing dividends amounting to IDR20/share or equals to IDR234.53 billion. The dividend payout ratio is around 13.32% from the net income in FY19 of IDR1.76 trillion. Dividend yield is at 1.57% while the distribution date is yet to be announced. (Market Bisnis) MNCS comment: Amidst the tough condition, JPFA is still distributing dividend and showing a solid performance. JPFA is traded at 8.29x PE, lower than peers.
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ELSA IJ recorded revenue growth of 8.1% YoY to IDR2.06 trillion in 1Q20 (vs IDR1.9 trillion in 1Q19). For the composition of total revenue, upstream oil and gas services contributed 55%, energy distribution and logistics services 40% and the remaining 5% came from supporting services. While net profit decrease -31.75% YoY to IDR51.8 billion in 1Q20. (IDNFinancials) MNCS Comment: Despite declining oil prices, ELSA was able to equalize top-line growth, but the bottom-line weakened due to increased financial cost in 1Q20. ELSA is traded at 4.96x/0.45x PE/PBV.
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PNBS IJ will issue 15.04 million new shares, through a rights issue with a target of obtaining IDR1.5 trillion. Management said the nominal value for the shares is IDR100 per share. But the company has not yet determined the exercise price that will be used in the rights issue. PNBS has yet explained when the rights issue will be held, since it is still waiting for the effective date from the Financial Services Authority (OJK). (IDNFinancials) MNCS Comment: We see that the right issue is aimed to strengthen the capital structure. PNBS is traded at 0.71x PBV.
IHSG Updates
JCI slipped by -1.25% to 4,925.25 on Thursday (18/06), followed by a net foreign sell reaching IDR80.47 billion. The decrease was due to the profit taking which resulted on the decline of banking and basic industry. Although, BI decided to lower the rate even further by 25 bps, the market seems to have anticipate this move and so the issue does not affect the market movement. Meanwhile, the Rupiah exchange rate against the USD was strengthening at IDR14,078. We estimate JCI will move in the range of 4,816-5,040 while waiting for Motorbike Sales as of May 2020. Today's recommendation: TBIG, BBTN, BRPT, PTBA.
Corporate Action
Cum Dividend Date: JSMR, UNTR
RUPS: TLKM
Disclaimer On
TBIG,
BBTN,
BRPT,
PTBA,
JPFA,
PNBS,
ELSA
