24 Mei 2021
MNCS Morning Navigator 24 May 2021
Global Market Highlight
DJIA grew by +0.36% on Friday (21/05) while S&P 500 and Nasdaq decline (-0.08%/-0.48%). Wall Street closing was varied as investors are trying to figure out how long the Fed is going to continue to try to keep rates lower for longer. Some investors are warming to the idea of pricing pressures, which has been attributed to some of the market rebound that would be harmed by a rapid surge in inflation. However, the idea of temporary inflation seems to be creeping into the minds of the financial community, helping to calm interest in commodities. Moreover, the market will look forward to several data releases today, such as: 1) US Chicago Fed National Activity Index; 2) Japan BoJ Gov Kuroda Speech; 3) Taiwan Unemployment Rate.
Domestic Update
• BI released Indonesia's Balance of Payments (NPI) in 1Q21 which recorded a surplus of USD4.1 billion. With these developments, the position of foreign exchange reserves at the end of March 2021 reached USD137.1 billion. Meanwhile, the current account in 1Q21 recorded a deficit of USD1 billion (0.4% of GDP). This development was supported by the achievement of a surplus in the goods balance due to improved export performance in line with increased demand from trading countries and rising commodity prices.
• BI released Indonesia's external debt position in 1Q21 of USD415.6 billion (-0.4% QoQ /+ 7% YoY). This development was driven by a decline in the government's external debt to USD203.4 billion (-1.4% QoQ). Private external debt also recorded slowing annual growth.
• Furthermore, there was an addition of 867 new Covid-19 cases in Jakarta yesterday.
Company News
1. WIKA IJ has secured a new contract of IDR4.9 trillion in 4M21. The gain is up 75% YoY (vs IDR2.8 trillion in 4M20). WIKA is aiming for a new contract target of IDR40.13 trillion in FY21E. So that the realization until April 2021 is equivalent to 12.21% of this year's target (Kontan). MNCS Comment: Despite the low achievement of new contracts from the FY21 target, we assess that there is a positive trend of the growth that has occurred. WIKA still has the potential to realize the new contract target, accompanied by the government's plan to rebuild infrastructure in FY21. WIKA is trading at 59.63/0.81x PE/PBV.
2. BMRI IJ has distributed KUR amounting to IDR13.1 trillion and was distributed to 135,538 debtors in 1Q21. The KUR has been distributed to the production sector as much as IDR7.53 trillion or 57.5% of the total distribution. Meanwhile, Bank Mandiri KUR distribution is currently dominated by the agricultural sector with a realization of IDR3.5 trillion or around 27.17% of the company's total KUR distribution (Emiten News). MNCS Comment: Taking into account the high public demand for KUR, BMRI also plans to increase the KUR ceiling from the current IDR31 trillion. This is certainly an indicator of starting recovery in MSME business activity which is expected to get stronger in 2H21E. BMRI is currently trading at 11.48/1.50x PE/PBV.
3. INTP IJ recorded sales volume of 1.3 million tons during Apr-2021. This realization was 13% higher YoY, but INTP's sales volume decreased on a MoM basis. Sales in Apr-2021 were around 100,000 tons lower than sales in Mar-2021 which reached 1.4 million tons (Kontan). MNCS Comment: The increase in the company's sales volume this year is due to better economic growth compared to last year, thereby increasing optimism for the resumption of construction and infrastructure projects. Currently INTP is trading at 30.98x/1.93x PE/PBV.
IHSG Updates
JCI slipped by -0.42% to 5,773.12 on Friday (21/05) while net foreign buy reaching IDR129.37 billion. JCI fell despite the positive macro data release. The weakening of JCI was led by the industrial and property sector while the technology and finance sector still managed to rise. Meanwhile, the Rupiah exchange rate was strengthening at IDR14,355. We estimate JCI will move in the range of 5,735-5,850 while waiting for the 7DRR Interest Rate Decision. Today's recommendation: BMRI, EXCL, PTBA, LPKR.
Corporate Action
RUPS: MBAP, ITMA
IPO: HOPE (IDR188/share)
Disclaimer On
BMRI,
EXCL,
PTBA,
LPKR,
WIKA,
BMRI,
INTP
