Global Market Highlights
DJIA rose by +0.26% on Tuesday (28/12) meanwhile, the S&P 500 weakened (-0.10%) followed by the Nasdaq (-0.56%). The Wall Street was mixed during the closing due to the profit taking by investors after an increase that occurred for 4 consecutive days. Besides that, investors were also considering store closures that occurred as a result of preventing a spike in cases due to the Omicron variant. Investors have a new view that the Omicron variant may achieve herd immunity because its impact is limited to the common cold. Today, the market will be looking toward several data releases such as: 1) US MBA Mortgage Applications; 2) US Goods Trade Balance Adv; 3) US Pending Home Sales YoY.
Domestic Update
• The Indonesian Ministry of Health reported the first local transmission of Covid-19 Omicron variant bringing the total cases to 47. MNCS Comment: Recent research and publications have shown that the Omicron variant has lower risk of hospitalization compared to Delta. However with the fast spreading of the virus variant and its finding in more than 100 countries only in a month, it remains a downside risk to the economic recovery.
• Furthermore, the second dose of vaccination rate nationally has reached 53.4% or equivalent to 111.17 million people.
Company News
1. FREN IJ through its subsidiary, PT Emas SF Digital Commerce (SFDC) and Alibaba Group affiliated company, Fonixtree Digital Singapore Ltd (FDSL) has signed a joint venture agreement for the establishment of PT Nuri Gaya Citra (NGC) on 22 December 2021 (Kontan). MNCS Comment: We see that the establishment of the NGC will increase the added value of digital services provided by the company for the customers in the future. FREN is trading at the level of 2.12x PBV.
2. MTEL IJ cooperates with PT Alita Praya Mitra (Alita) to expand fiber-optic service coverage by signing a Cooperation Agreement (PKS) for the construction and leasing of 6,000 kilometers of fiber optic network nationwide. The scope of cooperation in particular covers the areas in Sulawesi, Sumatra and Java (IQPlus). MNCS Comment: The company hopes this collaboration will be an organic company action to improve and strengthen the quality and quantity of digital ecosystem infrastructure in Indonesia along with support to implementation of national 5G technology. Currently, MTEL is trading at level 3.01x/0.31x PER/PBV.
3. GEMS IJ will distribute an interim dividend of IDR265.89/share (exchange rate IDR14.219/USD) or IDR1.56 trillion for the 2021 book year period. The cum dividend date is on January 6, 2022 (Kontan). MNCS Comment: The payout ratio stood at 55.97% from the 9M21 profit of IDR2.79 trillion. Dividend yield reached 3.02%. GEMS is trading at the level of 13.81x/10.86x PER/PBV.
IHSG Updates
JCI strengthened +0.35% to 6,598.34 on Tuesday (28/12) followed by net foreign buy which reached IDR535.41 billion. Several sectors supported the JCI rate, led by the energy sector strengthening (+2.48%), followed by the industrial sector (+1.74%). On the other hand, the cyclical sector weakened (-1.13%) followed by the basic industrial sector (-0.29%). The increase in the JCI is in line with the global index amid the outbreak of the Omicron variant, investors also ignore reports of local transmission cases of the Omicron variant due to optimism that this new variant will not have a significant impact on the economy going forward. In addition, the transaction value has increased by 25.65% compared to Monday (27/12) although it has not passed the December’s average transaction of IDR13.11 trillion by (28/12). On the other hand, Rupiah closed slightly lower at IDR14,227/USD level. We estimate that the JCI will move in the range of 6,555-6,620. Today's recommendations: APLN, UNTR, BIRD, UVCR.
Corporate Action
RUPS: BBYB, BACA, DEAL
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