Global Market Highlights
DJIA weakened -1.43% on Friday (11/02), followed by S&P 500 (-1.9%) and Nasdaq (+2.78%). Wall Street is under pressure as the surging Jan-22 inflation rate +7.5% YoY (vs +7.3% market consensus) gives signal for an aggressive monetary tightening. In addition, external sentiment in the form of rising geopolitical tensions between Russia and Ukraine which stated that Russia plans to take offensive steps in the 3rd week of Feb-22 added a negative catalyst for Wall Street. From the situations of the Covid-19 pandemic, there was a decrease in the weekly average of positive cases to 206,569, the lowest from mid-Jan-22 of 802,223. Today, the market will be looking toward several data releases such as: 1) US Consumer Inflation Expectations; 2) Eurozone Consumer Inflation Expectations; 3) China FDI (YTD) YoY.
Domestic Update
• Indonesia Consumer Confidence Index (CCI) strengthened 1.3 points to 119.6 in Jan-22 from 118.3 in Dec-21. MNCS Comment: Higher CCI was observed across most spending and age brackets. Consumer sentiment continued to improve despite the recent strike of the Omicron variant that triggered the 3rd wave outbreak. We believe this could be a key positive catalyst for Indonesia's economy to continue its recovery.
• Furthermore, the second dose of vaccination rate nationally has reached 65.1% or equivalent to 135.55 million people.
Company News
1. SILO IJ plans to conduct a stock split with a ratio of 1:8. As a result, the number of outstanding shares which is 1.62 billion will become 13 billion (Kontan). MNCS Comment: Through this stock split, the company stock liquidity will increase and is expected to reach more retail investors. SILO is trading at the level of 18.11x/2.04x PER/PBV.
2. ADMF IJ recorded IDR1.2 trillion of net profit, up +18.2% YoY in FY21. This was supported by an increase in new financing disbursement to IDR25.9 trillion, or +39% YoY, particularly in the new car, used car and new motorcycle segments (Bisnis Indonesia). MNCS Comment: We see that the company might continue its good performance this year along with the economic recovery and the extension of PPnBM-DTP incentives. ADMF is trading at the level of 6.56x/0.89x PER/PBV.
3. PALM IJ plans to buy back 110 million shares or equivalent to 1.55% of the issued and fully paid capital. The buyback period starts from 22 March 2022 - 22 September 2023 (Kontan). MNCS Comment: The Company estimates that this action will not have an impact on revenue considering the buyback is financed by internal cash. Through this buyback, it is expected to maintain the stability of the company's share price in the market. PALM is currently trading at 17.24x/1.20x PER/PBV.
IHSG Updates
JCI weakened -0.12% to 6,815.61 on Friday (11/02), followed by net foreign buys which reached Rp963.31 billion. The majority of sectors weakened led by the raw materials sector (-1.03%) followed by the health sector (-0.31%). On the other hand, the sectors that led the strengthening were the transportation sector (+1.66%) followed by the energy sector (+0.58%). JCI depreciated along with the majority of other Asian bourses including the SSE (-0.66%), Kospi (-2.04%) and Hang Seng (-0.07%) in response to investors’ concerns over an increase in US inflation Jan-22 by 7.5% YoY (vs 7.3% market consensus). Meanwhile, there were recorded additional positive cases of Covid-19 (13/02) as many as +55,209 which was allegedly going to prolong the tightening of mobility and hamper economic recovery. On the other hand, the Rupiah slightly weakened at IDR14,353/USD level. We estimate that the JCI will move in the range of 6,800-6,846 while waiting for the retail sales to be released. Today’s recommendation: BRMS, ADRO, BSDE, BWPT.
Corporate Action
RUPS: JMAS
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