Global Market Highlights
DJIA rose by +1.60% on Tuesday (21/12) followed by S&P 500 (+1.78%) and Nasdaq (+2.40%). Wall Street ended bullish as investors piled into energy and tech stocks as they continue to benefit from their shifts to digital platforms, and the supply chain issues have subsided. Meanwhile, Joe Biden on Tuesday ruled out the possibility of returning to the national pandemic lockdown as of March 2020, as the Omicron variant of Covid-19 sweeps across the US. Today, the market will be looking toward several data releases such as: 1) US GDP Growth Rate QoQ Final; 2) US Existing Home Sales MoM; 3) UK GDP Growth Rate YoY Final.
Domestic Update
• MoF reported government revenue reached IDR1,700 trillion while spending hit IDR2,310 trillion implying a budget deficit of IDR611 trillion (-3.63% GDP). MNCS Comment: We expect the government budget deficit to be at -5.17% GDP this year in line with MoF expectation at -5% to -5.2% GDP. Looking ahead in 2022 we also expect the budget deficit to reach -4.26% GDP below the state budget (APBN) target of -4.85% GDP on the back of fiscal consolidation agenda.
• Furthermore, the second dose of vaccination rate nationally has reached 51.5% or equivalent to 107.31 million people.
Company News
1. ADRO IJ will distribute an interim dividend of IDR156.62/share or (exchange rate IDR14,314/USD) or IDR5 trillion for the 2021 book year period. The cum dividend date is on December 29, 2021 (Emitennews). MNCS Comment: The payout ratio stood at 75.22% from the 9M21 profit of IDR6.66 trillion. Dividend yield reached 7.38%. ADRO is trading at the level of 8.44x/1.17x PER/PBV.
2. TOWR IJ will expand their organic sector by establishing 500-800 towers in FY22E according to future needs and tower orders. The company targets FY21E revenue to reach IDR8.04 trillion or grow +8% YoY (vs IDR7.45 trillion in FY20) (Emitennews). MNCS Comment: We see the company’s target will be achieved by the end of this year along with additional revenue coming from TOWR succeeded in acquiring PT Solusi Tunas Pratama (SUPR) for IDR16.7 trillion in early October-21. As of 9M21, the company’s revenue was recorded at IDR6.07 trillion or up +9.22% YoY. Currently, TOWR is trading at level 16.91x/5.08x PER/PBV.
3. AKRA IJ has approved the corporate action stock split with a ratio of 1:5. The current nominal value of AKRA is IDR100/share and will be split into IDR20/share. This action is expected to take effect in January 2022 (Kontan). MNCS Comment: We assess this stock split action as a positive sentiment encouraging the growth of the Indonesia capital market where retail investors can buy AKRA shares at more affordable prices and attract more retail investors in the future. AKRA trading at the level of 15.94x/1.88x PER/PBV.
IHSG Updates
JCI rose by +0.11% to 6,554.31 on Tuesday (21/12) followed by net foreign sell reaching IDR331.38 billion. JCI closed higher along with the strengthened majority sectors led by the industrial sector (+1.16%) followed by the property sector (+0.85%). On the other hand, the tech sector slipped by -1.80%, followed by the transport sector (-1.00%). The JCI's strengthening was in line with the strengthening of other Asian regional indices such as the Nikkei (+2.08%) and Hang Seng (+1.00%). Another positive catalyst came from the rising commodity prices such as CPO, coal and nickel which were able to provide fresh air amid issues related to the spread of the Covid-19 omicron variant. On the other hand, the Rupiah strengthened at IDR14,314/USD in the spot market. We estimate the JCI will move in the range of 6,550-6,600. Today's recommendations: AMRT, HOKI, CTRA, FREN.
Corporate Action
Cum Right Issue Date: BRMS (IDR70/share)
RUPS: JSMR, BGTG
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