MNCS Morning Navigator

07 Desember 2021

MNCS Morning Navigator December 07, 2021

Global Market Highlights

DJIA rose by +1.87% on Monday (06/12) followed by S&P 500 (+1.17%) and Nasdaq (+0.93%). Wall Street ended higher due to the easing concerns about the Omicron variant of the coronavirus. Germany’s Factory Orders contracted significantly by -6.9% MoM on October-21 indicating a drop in manufacturers’ demand due to ongoing supply-chain bottlenecks and the resurgence of the new Covid-19 variant. On the other hand, UK Construction PMI grew to 55.5 on November-21 from previously at 54.6 indicating a robust and accelerated expansion of overall construction activity. Today, the market will be looking toward several data releases such as: 1) Eurozone GDP Growth Rate QoQ and YoY; 2) Eurozone ZEW Economic Sentiment Index; 3) Germany ZEW Economic Sentiment Index.


Domestic Update
Indonesia FX reserves position is expected to increase to USD146 billion in Nov-21, higher than USD145.5 billion in the previous month according to market consensus. MNCS Comment: We expect Indonesia FX reserves position to stay above USD140 billion until the end of 2021 which we believe strong export performance is likely to maintain its position.
• Furthermore, the second dose of vaccination rate nationally has reached 47.5% or equivalent to 99.02 million people.


Company News
1. IRRA IJ obtained Auto Disable Syringe (ADS) contracts totaling 88.7 million units. With this acquisition, IRRA has booked a contract for the supply of syringes for the government’s vaccination program with a total of 141 million ADS syringes (Kontan). MNCS Comment: We see an increase in contract demand for ADS syringes was driven by the incessant global vaccination including Indonesia and the WHO suggestion of switching non-ADS syringe products to ADS. On the one hand, we see that the market share for domestic ADS syringes is still potential, where the use of domestic ADS products is only around 20%, with 80% of ADS syringes controlled by Oneject (IRRA) products. IRRA is trading at the level of 29.67x/6.61x PER/PBV.

2. BBTN IJ up to 10M21 BBTN credit growth rate increased by +3.24% YoY. Meanwhile, Third Party Funds (DPK) grew higher at +9.4% YoY (Emitennews). MNCS Comment: According to the OJK, the rapid growth of deposits in relation to the rate of credit demand needs to be watched out for, as it can affect bank profitability. However, we see that to overcome this problem and obtain more optimal profitability, the company has prepared various strategies, namely by: 1) collecting third party funds that are focused on low-cost funds and adjusting interest rates; 2) maintain loan yields; 3) improve credit quality; and 4) encourage non-interest income. Currently, BBTN is trading at level 9.17x/0.90x PER/PBV.

3. BJBR IJ targets credit disbursement to grow 9%-10% in FY22E. As of 3Q21, BJBR recorded credit growth of +6.9% YoY, which was above the national banking industry average of +2.21% YoY (Kontan). MNCS Comment: We see the company’s optimism target is above the average BI credit growth projection of 6%-8%. We see this target can be achieved driven by economic activity recovery and increasing public consumption in FY22E. BJBR trading at the level of 7.28x/0.97x PER/PBV.


IHSG Updates
JCI strengthened by +0.13% to 6,547.12 on Monday (06/12) followed by net foreign sell reaching IDR210.24 billion. JCI closed higher, led by the energy sector (+0.94%), followed by the infrastructure sector (+0.67%). On the other hand, the technology sector weakened by -1.30%, followed by the health sector (-1.22%). JCI closed higher amid changes to several new regulations by the IDX as the capital market SRO, such as the closing of broker codes. Meanwhile, negative sentiment still came from the outbreak of the Omicron Covid-19 variant which has begun to be found in the Southeast Asian region. On the other hand, the Rupiah weakened to IDR14,438 in the spot market. We estimate the JCI will move in the range of 6,509-6,574 while waiting for the released data of foreign exchange reserves. Today's recommendations: PTBA, WIKA, BANK, AMRT.


Corporate Action
Cum right issue date: NOBU (IDR1,205/share)
IPO: RMKE (IDR206/share)


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