Global Market Highlights
US stock exchanges are closed to commemorate Martin Luther King, Jr. day on (17/01) Wall Street markets which closed mixed on Friday last week (14/01) were affected by the poor performance of the financial statements of the banking issuers in 4Q21 and the rebound of the technology stocks. Meanwhile, from the commodity market, the price of WTI crude oil rose +0.4% to USD84.11 per barrel. The strengthening was driven by the tightening of crude oil supply of OPEC+ amid strong global demand after easing concerns due to the omicron variant. Today, the market will be looking toward several data releases such as: 1) Germany ZEW Economic Sentiment Index; 2) UK Unemployment Rate; 3) Eurozone ZEW Economic Sentiment Index.
Domestic Update
• Government will issue 7 series of securities including 2 bills and 5 notes through auction today. The indicative target set by the government at IDR25-37.5 trillion. MNCS Comment: We foresee that demand for government securities will remain robust from investors. The incoming bids are likely to hit at least IDR50tn. Therefore, the target set by the government is achievable despite the recent trend in rising yield globally. We expect demand for shorter maturity government bonds will be higher in the midst of a monetary tightening cycle.
• Furthermore, the second dose of vaccination rate nationally has reached 57.5% or equivalent to 119.77 million people.
Company News
1. AKRA IJ has budgeted (capex) around IDR250 billion of capex for FY22E. The company's funds will be allocated for logistics and oil business, also maintenance costs. The capex prepared was not large due to the company investing up to IDR7 trillion in FY17-FY21 (Bisnis Indonesia). MNCS Comment: We see that with the investment in the previous year, the company can focus on increasing its revenue this year. In addition, Driven by the mobility of people who are recovering after the pandemic, the potential for increasing demand for fuel oil (BBM), plus the increase in the number of smelters in the JIIPE area can be a positive catalyst for AKRA. AKRA is trading at the level of 15.30x/1.80x PER/PBV.
2. SMRA IJ recorded marketing sales revenue of IDR5.2 trillion in FY21 or up +59% YoY, exceeding the target set at IDR4 trillion. Marketing sales from Summarecon Bogor of IDR286 billion and Serpong of IDR114 billion were the main contributors (Bisnis Indonesia). MNCS Comment: We see the company might maintain its positive performance supported by the economic recovery and the extended VAT incentives for DTP until June 2022 which might bring a positive impact on the property industry. SMRA is trading at the level of 53.39x/1.43x PER/PBV.
3. PTPP IJ targets to obtain IDR31 trillion worth of new contracts in FY22E, up +45% YoY from the realization of new contracts in FY21 which was IDR21 trillion. The company targets the projects from the building sector of 34.56%, 30.95% from roads and bridges, 11.29% from industry and 7.90% from oil and gas (CNBC Indonesia). MNCS Comment: We see the company's optimism was driven by the opportunities to obtain new projects from its investment in Batang Integrated Industrial Estate. In addition, the G-20 Presidency project and the construction of a new capital city might also be positive catalysts for the company. PTPP is trading at the level of 33.41x/0.54x PER/PBV.
IHSG Updates
JCI weakened -0.72% to 6,645.04 on Monday (17/01) followed by net foreign buy which reached Rp83.31 billion. The majority of sectors experienced a decline, led by the technology sector (-4.27%) followed by the raw materials sector (-1.69%). On the other hand, only the energy sector strengthened by +0.49%. Negative catalysts came from the release of trade balance Des-21 data which maintained a surplus but was below the market consensus of USD1.02 billion (vs USD3.13 billion on consensus), export value growth in Dec-21 was also below the consensus set at +35.3 % YoY (vs +40.4% YoY on consensus). Investors also tend to wait and see ahead of the BI board of governors meeting regarding the interest rate. On the other hand, Rupiah closed higher at IDR14,297/USD level. We estimate that the JCI will move in the range of 6,625-6,700. Today's recommendations: PWON, AMRT, ASII, BBTN.
Corporate Action
RUPS: SGRO
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