Global Market Highlight
DJIA rose by +1.76% on Monday (21/06), followed by S&P 500 (+1.40%), and Nasdaq (+0.79%). The Wall Street ended sharply higher as investors piled back in to energy and other sectors expected to outperform as the economy rebounds from the pandemic. The market will look forward to several data releases today, such as: 1) US Existing Home Sales MoM; 2) UK Public Sector Net Borrowing; 3) Euro Zone Consumer Confidence Flash.
Domestic Update
• Government impose another stricter activities restriction due to surging Covid-19 infection that will be implemented today. Shopping mall & groceries store will be closed at 8:00 AM with visitors maximum capacity 25%. Meanwhile office activities will be curbed to only 75% maximum capacity in the red zone & 50% in non-red zone. MNCS comment: In addition to the implementation of PPKM micro for 2-week period, GoI also needs to improve testing and tracing as well as ramping up vaccination campaign in order to have effective pandemic intervention measures. Further rising epidemic curve will only pushing out Indonesia's economy from its recovery path.
• Bank Indonesia (BI) will release official data of Money Supply (M2) in May 2021 at 10:00 AM. MNCS Comment: In April 2021, M2 rose 11.5% YoY, lower than previous month at 17.4% YoY. We expect M2 will still have a positive growth on the back of Lebaran momentum. Overall, liquidity remains ample as BI continue to support the economy through accommodative policy. As of 21 May, BI has injected IDR 88.91 trillion of liquidity to banking system through QE. We believe that money velocity will also increase in May as it's reflected on May inflation figure at 1.68% YoY, higher than 1.42% YoY in April.
• Furthermore, there was an addition of 5,014 new Covid-19 cases in Jakarta yesterday.
Company News
1. INTP IJ recorded cement sales volume reaching 6.2 million tons in 5M21 or up +10% YoY, while cement sales volume in May-21 was recorded at 900,000 tons or up +12.5% YoY (vs 800,000 tons in May-20 ). INTP targets cement sales volume growth in FY21E of 4% YoY (Kontan). MNCS Comment: The increase in INTP sales is in line with national cement sales which also grew 6% YoY. Cement sales are still dominated by bagged cement and are influenced by optimism for economic recovery due to the Covid-19 pandemic. INTP is trading at 28.36x/1.77x PE/PBV.
2. PTPP IJ obtained contracts amouting to IDR6.7trillion as of 5M21 which consist of several projects such as Dawuan Toll Cisumdawu Junction (IDR825 billion), tower pawnshops (IDR594 billion), KIT Batang road (IDR350 billion) and other projects. Government projects contributed by 28.34% while private projects led by 56.34% (CNBC Indonesia). MNCS Comment: PTPP will try to optimize new contracts from BUMN and BUMD. PTPP is also reviewing the divestment of one of its assets in FY21. PTPP is currently trading at 38.89x/0.56x PE/PBV levels.
3. MRAT IJ posted net sales of IDR88.59 billion in 1Q21, up +30.10% YoY (vs IDR68.09 billion in 1Q20). However, COGS increased from IDR25.27 billion in 1Q20 to IDR45.63 billion in 1Q21. MRAT posted a net profit of IDR1.91 billion in 1Q21 which was up +54.03% YoY (vs IDR1.24 billion in 1Q20) (Kontan). MNCS Comment: The good performance cannot be separated from MRAT's focus on the herbal and personal care segment this year. For distribution channels, MRAT has also strengthened sales through digital networks through the HaloDoc application, Alodokter, and other healthcare distribution channels to e-commerce. Currently MRAT is trading at 1.77x PBV levels. Currently MRAT is trading at 0.46x PBV levels.
IHSG Updates
JCI fell by -0.18% to 5,996.25 on Monday (21/06) while net foreign buy reaching IDR2.10 trillion. JCI was weakened along with most sector, led by industrial (-1.61%), property (-1.54%), and energy (-1.14%). On the other hand, health sector managed to strengthen by +8,90%, followed by transport and non-cyclical. JCI weakened as market response to the discourse tightening of PPKM and tapering sentiment as the Fed's projections will increase the interest rate earlier. Meanwhile, the Rupiah exchange rate was weakening at IDR14,428. We estimate the JCI will move in the range of 5,850-6,134 while waiting for loan growth YoY data release. Today's recommendation: DSNG, MIKA, PWON, TKIM.
Corporate Action
Cum Dividen Date: TPIA (IDR51,78/share), MTLA (IDR7,11/share)
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