Global Market Highlight
DJIA slipped by -0.46% on Thursday (18/03) followed by S&P 500 (-1.48%) and Nasdaq (-3.02%).Wall Street slumped as tech stocks fell after a spike in US bond yields that have stoked investor worries about paying for higher-valued stocks with a longer road to growth. The US10-Year yield topped 1.7% a day after the Fed announced dovish monetary policy guidance, by raising its growth and inflation forecast but keeping intact its lower-for-longer outlook on rates. Moreover, the market will look forward to several data releases today, such as: 1) Japan BoJ Interest Rate Decision; 2) Japan Inflation Rate; 3) UK Consumer Confidence.
Domestic Update
• Bank Indonesia decided to maintain the BI 7-Day Reverse Repo Rate at 3.50%, the Deposit Facility rate at 2.75%, and the Lending Facility rate at 4.25%. This policy was implemented to maintain the stability of the Rupiah exchange rate against increasing uncertainty on global financial markets, amidst the predicted low inflation.
• Furthermore, there was an addition of 1,719 new Covid-19 cases in Jakarta yesterday.
Company News
1. PPRE IJ posted revenue of IDR2.33 trillion in FY20 or decreased 39.35% YoY (vs IDR3.85 trillion in FY19). While, Gross Profit also decreased by 48% YoY to IDR442.35 billion in FY20. PPRE posted a net profit of IDR58.56 billion in FY20 which decreased 82.32% YoY (vs IDR331.27 billion in FY19) (Bisnis.com). MNCS Comment: FY20 realization fell on the average of construction companies. However, we believe in FY21E the performance of construction companies will improve as infrastructure tenders begin to recover. Currently PTPP is trading at 103.55x/1.05x PE/PBV.
2. TOTL IJ obtained a new hotel construction contract amounting to IDR26 billion until February 2021. The acquisition of the new contract is equivalent to 1.3% of the new contract target in 2021 of IDR2 trillion. The order book of the previous year's contract was IDR3 trillion. Meanwhile, the tender value currently being followed is IDR7.33 trillion (Bisnis.com). MNCS Comment: TOTL's new contract for hotel construction as the property business recovers and Covid-19 begins to subside, giving rise to optimism in the real sector. TOTL is currently trading at 10.45x/1.06x PE/PBV.
3. SMRA IJ posted marketing sales of IDR1.2 trillion in a 2-month period, from January to the end of February 2021. The realization increased by 43% on a monthly basis and 175% on an annual basis. This year's marketing sales target of IDR3.5 trillion has been achieved up to 35%. Marketing sales are obtained from the sales of products in Summarecon Bekasi, Summarecon Serpong and Summarecon Bogor (Bisnis.com). MNCS Comment: People's purchasing power for property has improved as the need for housing has increased by the millennial generation. SMRA is trading at 2.08x PE/PBV.
IHSG Updates
JCI fell by + 1.12% to 6,347.83 on Thursday (18/03) followed by net foreign buy reaching IDR622.80 billion. The strengthening of the JCI was driven by BI's decision on interest rates following the Fed's steps to maintain its policy at the 3.5% level. In addition, several sectors such as miscellaneous industry, finance, mining, infrastructure, and basic industries experienced significant gains above 1%. On the other hand, the trade, property and agri sectors continued to weaken, where the weakness in the agri sector was caused by the volatility of CPO prices. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,410. We estimate JCI will move in the range of 6,300-6,400 while waiting for the motorbike sales data release. Today's recommendation: ASII, EXCL, ICBP, DOID.
Corporate Action
Public Expose: INTP
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