Global Market Highlight
DJIA was flat by -0.04% on Thursday (21/01) followed by the gains on S&P 500 (+0.03%) and Nasdaq (+0.55%). The Dow closed just below the flatline as strengthening in technology stocks was offset by weakness in energy. On the flip side, S&P and Nasdaq gained as investors cheered the Biden administration's strategy to better tackle the Covid-19 pandemic. The U.S. President revealed plans to accelerate testing, vaccine rollouts, and reopenings. Moreover, the market will look forward to several data releases today, such as: 1) US Markit Manufacturing PMI; 2) Japan Inflation Rate; 3) Eurozone Markit Manufacturing PMI.
Domestic Update
• BI decided to maintain the BI 7-Day Reverse Repo Rate (BI7DRR) at 3.75%, the Deposit Facility rate at 3.00%, and the Lending Facility rate at 4.50%. This decision is consistent with forecasts for low inflation and maintained external stability, as well as efforts to support economic recovery.
• Furthermore, there was an addition of 3,151 new Covid-19 cases in Jakarta yesterday.
Company News
1. WSKT IJ budgeted a capital expenditure of IDR11 trillion FY21E. The majority of the funds will be used for the settlement of several toll roads obtained, including the Jogja-Bawen toll road. This capex will be used for: 83% will be used for toll road needs, 11% for Waskita Realty, 4% for construction, 1% for precast concrete and the rest for other infrastructure. The source of funding for FY21E's capex will come from toll divestment this year and through bank loans (Kontan). MNCS Comment: WSKT plans to divest around 6 to 11 toll roads, and to continue the projects resulting from the divestment. Currently WSKT is trading at -7.05x/1.86x PE/PBV.
2. TBIG IJ signed an unsecured revolving credit facility worth USD275 million or equivalent to IDR4.1 trillion. These loan facilities from a number of banks bear interest at Libor +1.75% per annum for foreign creditors. Meanwhile, the interest for domestic creditors is at Libor +1.85% per year. This fund will be used to extend the average tenor of TBIG's debt structure (Investor Daily). MNCS Comment: We believe TBIG still has room to seek funding through loan facilities, in line with the capital-intensive nature of tower business and the net gearing ratio which is still at the 3.5x level. TBIG is currently trading at 51.15x/8.51x PE/PBV.
3. LINK IJ managed to record an additional 171,000 subscribers to 839,000, an additional 211,000 potential home connection networks to 2.68 million, and network penetration increased by 31.3% in FY20. LINK managed to increase its customer base by 25.6% YoY in FY20 (vs 668,000 subscribers in FY19) (Investor Daily). MNCS Comment: LINK's performance benefited from the pandemic along with increased activity from home (WFH). The earnings are targeted to increase by around 5% in FY20E. LINK is trading at the level of 9.25x/1.89x PE/PBV.
IHSG Updates
JCI dropped by -0.25% to 6,413.89 on Thursday (21/01) followed by net foreign sell reaching IDR137.55 billion. JCI fell as the finance and property sector weakened following the interest rate decision. On the other hand, the agriculture sector and miscellaneous sector are still going strong. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,000. We estimate JCI will move in the range of 6,288 – 6,500 while waiting for Foreign Direct Investment Data Release. Today's recommendation: JSMR, TINS, ADRO, BBKP
Corporate Action
Rights Issue: MITI (IDR50/share)
RUPS: INDX, GOLD
Disclaimer On
