Global Market Highlight
DJIA rose by +0.04% on Thursday (12/08) followed by the S&P 500 (+0.30%), and Nasdaq (+0.35%). Wall Street closing was higher after an updated report on weekly US jobless claims matched with the forecasts of 375,000 people or decreased from last week at 387,000 people. Subsequently, the Labor Department's monthly consumer price index showed that growth was in line with consensus in July, up 0.5% MoM. Today the market may be watching several data releases such as: 1) US Michigan Consumer Sentiment Prel; 2) Eurozone Balance of Trade; 3) China FDI (YTD) YoY.
Domestic Update
• As of June-21, Financial Service Authority (OJK) recorded that total investment of the Pension Fund in Government Debt Securities (GDS) reached IDR84.43 trillion. The amount was 19.36% YoY higher than the same period last year. MNCS Comment: Total Pension Fund and Insurance holding position of tradable GDS has increased in terms of value and percentage year to date. It is reasonable that these financial institutions are naturally less aggressive and having a longer investment time frame. Given the recent domestic bond rally driven by lowering US treasury yield, rupiah stability and lower external pressure. These factors have boosted investors appetite towards fixed income asset particularly domestic investors. We believe that GDS still offer attractive risk adjusted return compared to the other assets. This is also in line with the success of GDS auction which continuously attracting fund flow to finance government budget. However the risk remains linger given there is a possibility of stimulus tapering in 4Q21 taken by the Fed amid persistent high inflationary pressure and strengthening job market.
• Furthermore, there was an addition of 1,078 new Covid-19 cases in Jakarta yesterday.
Company News
1. ERAA IJ recorded IDR21.35 trillion revenue in 1H21 grew by +47.65% YoY (vs IDR14.46 trillion in 1H20). COGS increased from IDR13.13 trillion in 1H20 to IDR19.17 trillion in 1H21. ERAA recorded IDR558.54 billion net profit in 1H21 increased by +392.44% YoY (vs IDR113.42 billion in 1H20) (Kontan). MNCS Comment: ERAA's solid performance supported by an increase in cellular and tablet sales (+59.57% YoY) and other electronics sales as well as an increase in the accessories segment. We believe it was supported by Eid momentum. Currently ERAA is trading at 9.34x/1.83x PE/PBV levels.
2. WSKT IJ recorded IDR4.71 trillion revenue in 1H21 slipped by -41.31% YoY (vs IDR8.03 trillion in 1H20). COGS decreased from IDR6.97 trillion in 1H20 to IDR4.54 trillion in 1H21. WKST recorded IDR41.02 billion net profit in 1H21 or a significant increase (vs net loss of IDR1.09 trillion in 1H20) (Bisnis Indonesia). MNCS Comment: The net profit generated was due to a decrease in cost of revenue and operations, and WSKT recorded other income of IDR2.68 trillion in 1H21. Currently WSKT is trading at 1.59x PBV levels.
3. BRMS IJ booked USD6.12 million revenue in 1H21 rose by +140% YoY (vs USD2.55 million in 1H20). COGS increased from USD455.92 thousand in 1H20 to USD1.41 million in 1H21. BRMS recorded USD4.43 million net profit in 1H21 or an increase of +356% YoY (vs USD969.71 thousand in 1H20) (Bisnis Indonesia). MNCS Comment: We believe that BRMS' decent performance is supported by the coal price that keeps spiking followed by the exist of PT Bhumi Satu Inti as the largest BMRS’s buyer. Currently BRMS is trading at 75.88x/0.75x PE/PBV levels.
IHSG Updates
JCI rose by +0.84% to 6139.65 on Thursday (12/08) while net foreign sell reaching IDR505.57 billion. JCI closed higher in most sectors led by the infrastructure sector (+2.72%) followed by the industrial sector (+2.59%). On the other hand, the technology sector weakened by -1.62% followed by the health sector (-0.60%). JCI closed higher due to the FED not implementing its monetary policy tightening yet. From domestic news, the decline in daily Covid-19 cases supports the strengthening of JCI. Meanwhile, the Rupiah exchange rate was stagnant at IDR14,383. We estimate the JCI will move in the range of 6,050-6,150 while waiting for the balance of trade data release. Today's recommendation: UNTR, SMGR, JSMR, IRRA.
Corporate Action
Cum Dividend Date: SIDO (IDR15.3/share), NELY (IDR5/share)
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