Global Market Highlights
DJIA rose +1.22% on Tuesday (15/02), followed by the S&P 500 (+1.58%) and the Nasdaq (+2.53%). Wall Street's performance was boosted by the easing of Russian-Ukrainian geopolitical tensions as Russia pulled its troops from the Ukrainian border. In addition, the rally that occurred in semi-conductor stocks ahead of the release of financial reports supported Wall Street's pace, followed by airline and ship stocks. From the developments of the Covid-19 pandemic, the weekly average of new positive cases continued to decline to reach 151,056 (vs. 173,857 previously), lower than mid-Jan-22 which peaked at 802,223. On the release of economic data, PPI producer prices for Jan-22 rose +1% MoM/+9.7% YoY beating the forecast at +0.5% MoM/9.1% YoY. Today, the market will be looking toward several data releases such as: 1) US Retail Sales MoM; 2) UK Inflation Rate YoY; 3) China Inflation Rate YoY.
Domestic Update
• Domestic automobile sales reached 96,673 units in Dec-21 and marking the highest level since the pandemic. Domestic automobile sales grew +10.6% MoM/+58.9% YoY. MNCS Comment: We believe several key driver in boosting domestic automobile sales in Dec-21 including : 1) improving mobility; 2) lower interest rate and 3) government PPnBM relax. We projected domestic automobile sales to hit pre-pandemic level in FY22F.
• Furthermore, the second dose of vaccination rate nationally has reached 65.5% or equivalent to 136.38 million people.
Company News
1. ASII IJ recorded car sales of 44,308 units, up +65.14% YoY in Jan-22 (vs 26,830 units in Jan-21). Sales from Toyota and Lexus as the main contributors reached 22,886 units, which increased compared to Jan-21 of 16,047 units (Bisnis Indonesia). MNCS Comment: We see that this achievement was in line with the economic recovery that leads to increase in people's purchasing power. In addition, the extension of PPnBM DTP incentives might also be a positive catalyst for the company. ASII is trading at the level of 11.15x/1.34x PER/PBV.
2. HEAL IJ plans to buyback shares with a maximum total purchase of IDR100 billion or equal to 80 million shares. The buyback period starts from 15 Feb-22 to 24 Feb-22. MNCS Comment: The company estimates that this action will not have a significant impact on revenue considering that the company has sufficient working capital and cash flow. Through this buyback, it is expected to maintain the stability of the company's share price in the market. HEAL is trading at the level of 15.09x/4.98x PER/PBV.
3. AALI IJ plans to achieve net zero emission in the long term. The company will evaluate the use of technology to minimize emissions and conduct a reforestation program in several critical lands that are no longer productive (Kontan). MNCS Comment: We see that the company's commitment is in line with the national net zero emission target in 2060. Besides that, this effort might also make AALI more competitive and attractive for investors. AALI is trading at the level of 10.71x/1.05x PER/PBV.
IHSG Updates
JCI rose +1.08% to 6,807.49 on Tuesday (15/02), followed by net foreign buys which reached Rp968.08 billion. The majority of sectors strengthened, led by the industrial sector (+2.23%) followed by the financial sector (+1.42%). On the other hand, the sectors that experienced weakness were the technology sector (-0.12%) and the transportation sector (-0.07%). After experiencing strong pressure in the previous trade, the index rebounded as worries over external sentiment eased and positive economic data was released. From the external side, investors can breathe a sigh of relief after Russia withdrew its troops from the Ukrainian border and will open up diplomatic options for the conflict. Meanwhile, from domestic news, Indonesia's trade balance maintained its surplus in Jan-22 of USD930 million, supported by the difference in export value of USD19.16 billion (-14.29% MoM/+25.31% YoY) and import value of USD18.23 billion (-14.62% MoM/+36.77% YoY). On the other hand, the Rupiah strengthened at IDR14,303/USD level. We estimate that the JCI will move in the range of 6,750-6,850 while waiting for the current account to be released. Today’s recommendation: BNBA, PGAS, BUKA, TAPG.
Corporate Action
RUPS: BUKA
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