MNCS Morning Navigator 20 July 2020

Global Market Highlight

DJIA slipped by -0.23% on Friday (17/07) althoughfollowed by the strengthening on S&P 500 (+0.28%) and Nasdaq (+0.28%). The various movement occurred despite additional cases of new Covid-19 infections continues to increase in various states but news of the latest development of Covid-19 vaccine candidates whose numbers continue to grow and show positive results helped boost investor risk appetite. Meanwhile the Fed will reportedly continue to purchase financial assets at a rate of USD120 billion per month and is currently reviewing monetary policy in addition to quantitative easing (QE) to inject liquidity into the economy and keep borrowing costs low for a fairly long period of time. Moreover, the market will look forward to several data releases today, such as: 1) China Loan Prime Rate; 2) Japan Balance of Trade; 3) Hong Kong Unemployment Rate.

Domestic Updates

Indonesia's Foreign Debt was recorded at USD404.7 billion at the end of May 2020 which according to BI remained under control with a healthy structure. Indonesia's external debt consisting of public sector (Government and Central Bank) of USD194.9 billion and private sector (including SOEs) of USD209.9 billion. Indonesia's external debt grew 4.8% YoY, higher than the 2.9% YoY growth in April 2020, influenced by net external debt withdrawals, both government and private external debt. In addition, the strengthening of the Rupiah against the US dollar also contributed to an increase in Rupiah-denominated foreign debt.

Company News

1. LSIP IJ will distribute cash dividends amounting to IDR102.3 billion or IDR15 per share. The dividend payout ratio is equivalent to 40.29% of FY19 net profit while the dividend yield stood at 1.59%. SIMP holds 59.48% of ownership on LSIP stocks while 40.47% belongs to the public. Cum date will be at July 24, 2020 (Market Bisnis). MNCS Comment: LSIP’s net profit in FY19 fell by 23.38% YoY, but they still managed to distribute dividend although with lower yield (1.67% in FY19). LSIP is currently traded at 19.69x/0.75x PE/PBV.
2. ICBP IJ will distribute IDR2.5 trillion cash dividends. The dividend payout ratio is equivalent to 49.76%. This equals to IDR215 per share with 2.32% yield. INDF will get 80.53% of dividend, as the major shareholder. The cum date will be at July 23, 2020 (Market Bisnis). MNCS Comment: We believe ICBP still provide an attractive dividend yield at 2.32%, higher compare to previous year at 2%. ICBP is currently traded at 13.64x/3.96x PE/PBV.
3. TOTL IJ will distribute a dividend of IDR34.10 billion from or equivalent to around 19.41% of the FY19 net profit. Dividend per share stood at IDR10 with yield reaching 3.01%. Cum date will be on July 23, 2020 (Kontan). MNCS Comment:  TOTL is still solid in distributing dividends despite a 15.79% YoY drop in FY19 net profit and the impact from Covid-19 pandemic. TOTL is currently traded at 4.61x/0.99x PE/PBV.

IHSG Updates

JCI decreased by -0.37% to 5,079.59 on Friday (17/07)followed by net foreign sell reaching IDR400.53 billion. These weakening occurred amid various movements of the global and regional Asia indices. Although BI has took the accommodative step of cutting interest rates by 25 basis points. In total this year the Indonesian monetary authority has cut its benchmark interest rate by 100 bps. The incline on the Covid-19 cases potentially hampered the index movement as of yesterday there are 1,639 new Covid-19 cases making the total reach 86,521 cases in Indonesia. We estimate JCI will move in the range of 5,022-5,111 while waiting for Loan Growth data release. Today's recommendation: BBCA, ANTM, WIKA, ICBP.

Corporate Action

Cum Dividend: DUTI, STTP

IPO: PPGL

Disclaimer On

BBCA, ANTM, WIKA, ICBP, LSIP, TOTL, ICBP