Global Market Highlight
DJIA fell by -1.08% on Wednesday (18/08) followed by the S&P 500 (-1.07%), and Nasdaq (-0.89%). Wall Street closing was lower as the Federal Reserve's minutes from its July meeting signaled that the central bank could begin tapering its monthly bond purchases this year. Today the market will looking forward to several data releases such as: 1) US FOMC Minutes; 2) US Continuing Jobless Claims; 3) Eurozone Current Account.
Domestic Update
• Bank Indonesia (BI) will announce its policy rate today. Market consensus agree that the domestic central bank will keep the benchmark rate unchanged at 3.5%. MNCS Comment: BI has cut the 7 day reverse repo rate 6 times 25 bps each totaling of 150 bps since the pandemic began. We see that BI has no room to further cut the interest rate considering the Fed tapering that might be started by the end of this year. Keeping interest rate unchanged while at the same time maintaining accommodative macro policy through fiscal-monetary coordination remains needed as a pro-growth and pro stability policy.
• Furthermore, there was an addition of 1,029 new Covid-19 cases in Jakarta yesterday.
Company News
1. ACES IJ posted IDR3.39 trillion revenue in 1H21 decreased by -7.27% YoY (vs IDR3.65 trillion in 1H20). COGS decreased from IDR1.85 trillion in 1H20 to IDR1.74 trillion in 1H21. ACES recorded of IDR276.94 billion net profit in 1H21 or decreased by -23.56% YoY (vs IDR362.29 billion in 1H20) (Kontan). MNCS Comment: SSSG was observed to decline by -7.8% in 1H21. We see that the implementation of PPKM in 3Q21 will have an impact on decreasing ACES’s revenue. Thus, the online distribution strategy needs to be maximized. Currently ACES is trading at 39.79x/4.79x PE/PBV levels.
2. ADHI IJ received IDR520.5 billion payment from the government through PT Kereta Api Indonesia (Persero). This is the eighth funding for the Jabodebek LRT project phase I. This payment is made based on the progress of the work from July to September-2020. Thus, overall, ADHI has received payments for the construction of the Jabodebek LRT worth IDR13.8 trillion (CNBC Indonesia) . MNCS Comment: The payment for the LRT term is expected to be optimized to maintain the company's cash flow, amidst the low burn rate and delays in several ongoing projects. Currently ADHI is trading at 150.50x/0.45x PE/PBV levels.
3. WOOD IJ will distribute a FY20 cash dividend of IDR2.5/share or IDR15.90 billion of the total FY20 net profit of IDR314.01 billion. Cum Date August 23, 2021 (IQ Plus). MNCS Comment: WOOD's payout ratio is 5.06% of FY20 net profit, while the total dividend yield offered is 0.33%. Currently WOOD is trading at 11.69x/1.53x PE/PBV levels.
IHSG Updates
JCI rose by +0.50% to 6,118.15 on Wednesday (18/08) followed by net foreign buy reached IDR872.57 billion. JCI closed higher along with most sectors, led by the finance sector (+1.85%) followed by basic industry (+1.61%). On the other hand, the techno sector fell by -5.10% followed by energy (-1.68%). JCI strength due to the surplus on Indonesia's trade balance of USD14.42 billion. The total exports reached USD120.57 billion, while imports only at USD105.15 billion. Meanwhile, the Rupiah exchange rate was flat at IDR14,373. We estimate the JCI will move in the range of 6,060-6,150 while waiting for the interest rate decision. Today's recommendation: ANTM, BANK, ELSA, ISAT.
Corporate Action
Public Expose: DPNS, LEAD
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