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MNCS Morning Navigator

19 Januari 2022

MNCS Morning Navigator January 19, 2022

Global Market Highlights

DJIA weakened -1.51% on Tuesday (18/01) followed by S&P 500 (-1.84%) and Nasdaq (-2.60%). The compact weakening of Wall Street was triggered by a spike in the yield of T-note 10Y to 1.87% and affected technology stocks. The reaction of disappointment of the investors with the release of financial reports for banking stocks in 4Q21 is also still looming over the market. The economic data from NY Empire State Manufacturing The January index came in at -0.7 (vs 31.9 in Dec-21) which is far from the market consensus of 25. Today, the market will be looking toward several data releases such as: 1) US MBA Mortgage Applications; 2) Germany Inflation Rate YoY Final; 3) UK Inflation Rate YoY Final.

Domestic Update
• The Government of Indonesia successfully raised funding of IDR25 trillion from yesterday's securities auction. The total incoming bids were IDR84.84 trillion. MNCS Comment: Investors' demand for fixed income instruments remained robust as expected. The preference for maturity has also shifted towards shorter duration as the demand for bills was cumulatively the highest in yesterday's auction contributing 38.73% of all the incoming bids.
• Furthermore, the second dose of vaccination rate nationally has reached 57.7% or equivalent to 120.14 million people.

Company News
1. BIRD IJ collaborates with PT Bank Central Asia Tbk (BBCA) by launching a taxi booking feature using BCA mobile. In addition, there is a 30% discount for ordering taxis using the Lifestyle feature on BCA mobile (Emitennews). MNCS Comment: We see this collaboration will be an opportunity for the company's revenue growth with the company's commitment for digital transformation, supported by the restoration of community mobility after the relaxation of the PPKM policy by the Government. BIRD is currently trading at 0.66x PBV.
2. ADRO IJ was assigned to increase its production by 500,000 tons of coal for PLN amid the coal crisis. In FY21, the company's DMO fulfillment reached 26%-27% of the total production, exceeding the limit set of 25% (Bisnis Indonesia). MNCS Comment: We see that the company's compliance with the DMO will bring a positive impact due to the export prioritization policy for companies who fulfill 100% of the DMO. ADRO is currently trading at the level of 8.84x/1.23x PER/PBV.
3. EXCL IJ plans to focus on developing fixed broadband and mobile broadband convergence service in FY22E. It was realized by the company through the provision of XL Satu services and the expansion of XL home entertainment services (Kontan). MNCS Comment: We see the telecommunications industry has the potential to grow in FY22E along with the increase in internet data usage. In addition, the company's commitment to expand its network infrastructure outside Java and the development of 5G technology might be a positive catalyst for the company in the future. EXCL is trading at the level of 23.66x/1.62x PER/PBV.

IHSG Updates
JCI weakened -0.47% to 6,614.05 on Tuesday (18/01) followed by net foreign buy which reached IDR110.36 billion. All sectors experienced weakness, led by the technology sector (-2.71%) followed by the transportation sector (-2.29%). Despite the index opening in the positive territory, there was a continued decline to reach -1.66% and rebound although still closed in the red zone. The negative catalyst came from the update of the Omicron variant case where until (18/01) a total of 840 cases of the Omicron variant were recorded with 174 of them being local transmissions. Investors also wait and see ahead of the announcement of the BI-7DRR interest rate after the board of governors BI meeting (RDG) which will be held from today to tomorrow (19-20 Jan 22). On the other hand, Rupiah closed lower at IDR14,338/USD level. We estimate that the JCI will move in the range of 6,529-6,688. Today's recommendations: PGAS, MTEL, FREN, PTBA.

Corporate Action
RUPS: INCO, MAMI

Disclaimer On

PGAS MTEL FREN PTBA BIRD ADRO EXCL

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