Global Market Highlights
DJIA grew by +1.08% on Wednesday (15/12) followed by S&P 500 (+1.63%) and Nasdaq (+2.15%). Wall Street ended higher after the Federal Reserve said it would end its pandemic-era bond purchases in March-22 and would likely raise interest rates three times next year to tackle rising inflation. The UK Inflation Rate YoY has risen to its highest rate in a decade by reaching +5.1% YoY in November-21 driven by the rise of fuel price and living costs. In addition, the US Retail Sales only rose slightly by +0.3% MoM in November-21, lower than the market’s forecast, as high inflation suggests consumers bought fewer goods and services than expected at the start of the holiday shopping season. Today, the market will be looking toward several data releases such as: 1) US The Fed FOMC Economic Projection; 2) US Markit Manufacturing PMI Flash; 3) UK BoE Interest Rate Decision.
Domestic Update
• Bank Indonesia (BI) is expected to hold the benchmark policy rate (BI 7 Days Repo Rate) at 3.5%, Lending Facility at 4.25% and Deposit Facility at 2.75% in Dec-21. MNCS Comment: We believe, BI policy will focus on maintaining rates to stay competitive, averting massive outflows that will trigger Rupiah depreciation and shock in financial markets. On the other hand, BI also needs to remain accommodative in order to support economic recovery. Therefore holding interest rates unchanged will be appropriate policy in time of global monetary policy normalization.
• Furthermore, the second dose of vaccination rate nationally has reached 50.0% or equivalent to 104.09 million people.
Company News
1. ASII IJ recorded 790,524 units car sales in 11M21 or grew +66.46% YoY (vs474,900 units in 11M20). Astra’s LCGC car sales were recorded at 133,258 units in 11M21 or up +38.42% YoY (vs 96,264 units in 11M20). Astra’s car sales were recorded at 87,435 units in November-21 or rose +15,74% MoM (vs 75,544 units in October-21) (Bisnis Indonesia). MNCS Comment: We see the increase in ASII car sales supported by the relaxation of PPnBM stimulus and the implementation of GIAAS 2021 which launches several new cars that attract the public interest. In 11M21 ASII’s market share reached 55% and LCGC car sales in the amount of 78%. ASII is trading at the level of 12.16x/1.46x PER/PBV.
2. BIRD IJ has budgeted capex FY22E of around IDR1.2 trillion with the funding sources obtained from internal cash and bank loans. The company planned that capex will be allocated to buy 5,000 units of the new fleet in FY22E (Kontan). MNCS Comment: We see that the expansion carried out by BIRD next year will be quite in line with the economic recovery and PPKM relaxation by the government, which will have an impact on people’s activities and mobility. We estimate that expansion will have the potential to improve the company’s performance. On the other hand, BIRD also makes efficiencies by selling fleet units that have passed the vehicle eligibility age. Currently, BIRD is trading at level 0.79 PBV.
3. ESSA IJ recorded USD240.51 million revenue in 9M21 grew by +94.14% YoY (vs USD123.89 million in 9M20). COGS increased from USD123.27 million in 9M20 to USD145.27 million in 9M21. ESSA recorded USD8.63 million net profit in 9M21 (vs net loss of USD17.06 million in 9M20) (Kontan). MNCS Comment: ESSA’s performance growth was driven by the increase in ammonia and LPG prices with the largest contribution from ammonia sales which was recorded at USD210.85 million or up +106.26% YoY in line with the increase in ammonia prices (ASP) reached USD441/MT in 9M21 (vs USD227/MT in 9M20). Likewise, the increase in LPG sales of USD27.05 million in 9M21 or grew +42.45% YoY was derived from the increase in realized LPG prices of USD581/MT (vs USD399/MT). ESSA trading at the level of 47.41/2.50x PER/PBV.
IHSG Updates
JCI strengthened by +0.16% to 6,626.26 on Wednesday (15/12) followed by net foreign sell reaching IDR595.46 billion. JCI closed in the green zone in almost all sectors led by the finance sector (+0.46%), followed by the industrial sector (+0.39%). Meanwhile, the tech sector dropped by -1.31% followed by the infrastructure sector (-0.66%). The JCI closed slightly higher due to the surplus of Indonesia trade balance at USD3.51 billion level on Nov-21. The value of national exports rose almost +49% YoY and imports rose almost +60% YoY. On the other hand, the Rupiah flat at IDR14,334 level in the spot market. We estimate the JCI will move in the range of 6,600-6,640 while waiting for the released data interest rate decision. Today's recommendations: BANK, INDY, ELSA, BUKA.
Corporate Action
Cum dividend date: BFIN (IDR7/share)
IPO: BSML (IDR117/share)
Public Expose: ULTJ
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