MNCS Morning Navigator 21 December 2020

Global Market Highlight

DJIA slipped by -0.41% on Friday (18/12) followed by S&P 500 (-0.35%) and Nasdaq (-0.07%). Stock market drops following the U.S. Congress on Friday risked blowing through a midnight deadline to keep the government open and address the Covid-19 crisis, as a partisan fight over federal lending rules caused a fresh delay on a USD900 billion Covid-19 relief bill.Recent weak economic data has increased pressure on lawmakers to reach a deal. The prospect of continued monetary and fiscal stimulus has helped stocks look past the economic impact of the pandemic, and set them up for strong annual gains, despite a rocky start to the year. Moreover, the market will look forward to several data releases today, such as: 1) US Chicago Fed National Activity Index; 2) China Loan Prime Rate; 3) HK Inflation Rate.

Domestic Update

• Currently, the Directorate General of Taxes (DGT) is preparing implementing regulations for the new Stamp Duty Law amounting to IDR10,000 (Law Number 10 of 2020) starting January 1, 2021. Stamp Duty will be imposed on Trade Confirmation (TC) as a document for securities transactions (stocks, bonds, etc.) without any value limitation. While DGT is coordinating with monetary authorities and business actors to formulate this policy.
• Furthermore, there is an additional of 1.592 new Covid-19 cases in Jakarta yesterday.

Company News

1.        ARTO IJ has officially conducted a share purchase transaction with Gojek valued at IDR2.25 trillion on Friday (18/12/2020), with an exercise price of IDR1,150. Gojek through PT Dompet Karya Anak Bangsa had purchased 1.95 billion ARTO shares with the ownership rising to 22.16% or 2.4 billion shares from the previous 4.14% or 449.14 million shares. The purpose of the transaction is an investment with direct share ownership status (Market Bisnis). MNCS Comment: This partnerships aims to provide access to digital banking services through Gojek's platform; opportunities to reach captive market from Gojek's millions of users. ARTO is currently traded at 34.82x PBV.
2.        UNTR IJ has projected future performance starting from the gold mining segment, coal mining business segment, to heavy equipment. For the gold sales segment through the Martabe gold mine, UNTR is targeting production volume to return to normal to around 350,000 ounces in line with normal mining activities. Meanwhile, the projected coal mining contractor business line through Pamapersada Nusantara in 2021 will tend to be flat. The projected coal contractor business line will grow -5% to 0% next year (Kontan). MNCS Comment: Most companies estimate for coal is dovish. So it's wise to assume zero growth on the segment. UNTR is currently traded at 13.95x/1.64x PE/PBV.
3.        INDY IJ continue to diversify its business in renewable energy and gold mining projects. The revenue contribution from the non-coal segment is targeted to reach 50% by 2025. Apart from renewable energy projects, other business diversification is being carried out by the company is developing fuel oil storage tanks or fuel storage in Kariangau, East Kalimantan (Investor Daily). MNCS Comment: Though coal price rises lately due to increasing winter demand, but most of developed countries has shift towards renewable energy instead of coal. It is a great strategy to diversify it's business into other mining commodities. INDY is currently traded at 0.87x PBV.

IHSG Updates

JCI dropped by -0.15% to 6,104.32 on Friday (18/12) followed by net foreign sell reaching IDR2.68 trillion. JCI drop though most sectors still strengthened especially the commodity supported by the rising price, as well as property sector following the flat 7DRR. Meanwhile, the Rupiah exchange rate was weakening at IDR14,110. We estimate JCI will move in the range of 6,013 – 6,170 while waiting for loan growth data release. Today's recommendation: UNVR, TOWR, BRPT, JSMR.

Corporate Action

Cum Dividend Date: UNIC (IDR110/share)

RUPS: CASH, BCAP

Disclaimer On

UNVR, TOWR, BRPT, JSMR, INDY, UNTR, ARTO