MNCS Morning Navigator

24 Januari 2022

MNCS Morning Navigator January 24, 2022

Global Market Highlights

DJIA weakened -1.30% on Friday (21/01) followed by S&P 500 (-1.89%) and Nasdaq (-2.72%). The release of Netflix's disappointing financial report data resulted in a decline in its share price and affected other technology stocks. Investors will also observe the developments of the FOMC meeting conducted by the Fed on 25-26 Jan 2022 local time and anticipate a 25 bps interest rate hike in March with a probability of 88.7%. Pressure on Wall Street was also caused by the soaring cases of the omicron variant of the Covid-19 virus. Today, the market will be looking toward several data releases such as: 1) US Markit Manufacturing PMI Flash; 2) US Chicago Fed National Activity Index; 3) UK Markit/CIPS Composite PMI Flash.

Domestic Update
• Indonesia's banking loan disbursement grew 5.20% in FY21 in line with the CB expectation of 4-6% growth. Loan growth is expected to reach 8.7% FY22F. MNCS Comment: Despite gradual liquidity normalization enacted by the BI through increasing reserve requirements for commercial & sharia banks starting from Mar-22, we believe that the banking credit will not significantly be impacted since the industry remains having ample liquidity.
• Furthermore, the second dose of vaccination rate nationally has reached 59.5% or equivalent to 123.97 million people.

Company News
1. INDY IJ prepared USD193 million for capex in FY22E, or +54.65% YoY (vs USD124.8 million in FY21). Most of the capex will be allocated for its subsidiary PTRO, gold mining development, and new renewable energy (NRE) (Kontan). MNCS Comment: We see that the company's optimism is supported by its good performance in FY22 where up to 9M21 the company earned USD2.15 billion of revenue, or +43.28% YoY. In addition, the growing demand for NRE due to the net zero emission target by 2060 might be a positive catalyst for the company which is focusing on developing its NRE segment. INDY is trading at the level of 0.85x PBV.
2. ANTM IJ recorded a positive performance in FY21, where ferronickel production reached 25,818 tons, while nickel ore production reached 11.07 million wmt, up +131% YoY (vs 4.76 million wmt in FY20) (Bisnis Indonesia). MNCS Comment: We see that the company might maintain its good performance in the future along with the increasing demand for nickel supported by the development of the electric car battery industry. ANTM is trading at the level of 20.49x/2.30x PER/PBV.
3. TLKM IJ plans to consolidate its data center and establish a digital business holding company, where the consolidation of Telkom Group in the domestic area will be taken over by Sigma Tata Sedaya (STS). Telkom also formed PT Telkomsel Ekosistem Digital (TED) to strengthen its digital business (Bisnis Indonesia). MNCS Comment: We see that the consolidation might bring an opportunity for the company to maximize its performance on building the data center business ecosystem, supported by the growing potential for digital business in Indonesia. TLKM is trading at the level of 17.05/4.10x PER/PBV.

IHSG Updates
JCI rose +1.50% to 6,726.37 on Friday (21/01) followed by net foreign buy which reached Rp972.65 billion. All sectors supported the index, led by the raw materials sector which rose +1.96% followed by the energy sector (+1.92%). The decision of Bank Indonesia (BI) to maintain the BI-7DRR interest rate at 3.5% became a positive catalyst for the index. In addition, the strengthening of commodity prices such as nickel (+2.77%) and coal (+1.14%) as well as investor optimism about the economic recovery had spurred the index to continue its rally. On the other hand, Rupiah closed flat at IDR14,338/USD level. We estimate that the JCI will move in the range of 6,630-6,755 while waiting for the M2 data to be released. Today's recommendations: MEDC, UNTR, IRRA, BBCA.

Corporate Action

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