Global Market Highlights
DJIA wakened -0.19% on Tuesday (25/01) followed by S&P 500 (-1.22%) and Nasdaq (-2.28%). Wall Street is again under pressure due to the investors waiting for the results of the FOMC meeting by the Fed which will be announced on Wednesday (26/01), where it is estimated that the Fed will raise its benchmark interest rate (FFR) for the first time this year on Mar-22. Moreover, the geopolitical tensions in Ukraine are back in the attention of investors. In addition, the IMF cut its projected global GDP growth for FY22E to 4.4%, lower than the previous projection of 4.9% on Oct-21. This causes the market participants to be pessimistic amid the widespread spread of cases of the Omicron variant. Today, the market will be looking toward several data releases such as: 1) US New Home Sales MoM; 2) US MBA Mortgage Applications; 3) Canada BoC Interest Rate Decision.
Domestic Update
• Government successfully issued sharia securities for budget financing on Tuesday (01/25/22). Total funds raised were IDR11 trillion, while the incoming bids value were IDR38.29 trillion. MNCS Comment: Despite the success in sharia securities issuance, incoming bids value was lower than the previous auction of IDR55.35 trillion on Jan11, 2022. Furthermore, investors' appetite for shorter maturity fixed income assets was reflected by the incoming bid value of the sharia bill (SPNS12072022) which totaled IDR12.83 trillion. In our view, lower incoming bids and higher demand for shorter yielding assets were driven by external factors, primarily rising interest rate risk.
• Furthermore, the second dose of vaccination rate nationally has reached 59.8% or equivalent to 124.64 million people.
Company News
1. BBNI IJ plans to acquire Bank Mayora with an estimated transaction value of IDR3.5 trillion. Later, Bank Mayora will be transformed into a Digital Bank to support digitization and services to MSMEs (Market Bisnis). MNCS Comment: We see that the acquisitions made by the company are in line with increasing financial inclusion in the digital realm, which is expected to boost the company's performance and strategic steps this year. Currently, BBNI is trading at 1.06x PBV.
2. JSMR IJ provide capital expenditures (capex) of IDR9 trillion in FY22E for the development of new toll roads and improvement of toll road service standards. The company is also preparing a business strategy to add to its rest area portfolio (Kontan). MNCS Comment: We see that the increase in capex allocation is expected to support the expansion strategy that potentially increases their net profit performance in FY22E. JSMR is currently trading at 24.99x/1.26x PER/PBV.
3. NETV IJ officially listed on the stock exchange today after the completion of the Initial Public Offering (IPO) process with an estimated proceeds of IDR149.99 billion which will be used for the company's business operations and the capital of its subsidiary Net Mediatama Televisi (Market Bisnis). MNCS Comment: We see that with the potential for obtaining funds through the IPO, it is hoped that the company can maximize the realization of the use of funds to support business performance. Therefore, it may contribute to increasing the company's growth in the midst of the competitive broadcasting industry and growing net profit for the company so that it remains sustainable in the future.
IHSG Updates
JCI weakened -1.31% to 6,568.17 on Tuesday (25/01) followed by net foreign buy reaching IDR114.83 billion. All sectors weakened, led by the technology sector (-3.88%) followed by the transportation sector (-2.68%). The index opened in the red zone, depressed by the spread of cases of the Omicron variant, in which 1,665 Covid-19 patients were recorded to be exposed to the Omicron variant by (25/01). The spike in cases is allegedly able to increase the level of PPKM which will bring an impact on disrupting the supply chain. In addition, market participants are also waiting for the results of the FOMC meeting on (25/01) US time. Investors are worried that if the supply chain is disrupted, it will cause the inflation rate to get worse, which therefore causes the acceleration of interest rate hikes. On the other hand, the Rupiah weakened at IDR14,351/USD level. We estimate that the JCI will move in the range of 6,500-6,630 while waiting for the FDI. Today's recommendations: ASII, PGAS, TOWR, BNBA.
Corporate Action
IPO: NETV (IDR196/share)
RUPS: MGNA
Public Expose: ASPI
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