Global Market Highlights
DJIA weakened -0.38% on Wednesday (26/01) followed by the S&P 500 (-0.15%), while the Nasdaq is stagnant +0.02%. Wall Street closed mixed after the Fed's statement of raising its benchmark interest rate (FFR) for the first time this year on Mar-22. This action is supported by concerns over the inflation rate of more than 2% and the strength of the labor market. This Fed decision increased the 10y Treasury yield to 1.82%. Today, the market will be looking toward several data releases such as: 1) US GDP Growth Rate QoQ Adv; 2) US Durable Goods Orders MoM; 3) Germany GfK Consumer Confidence.
Domestic Update
• IMF projects Indonesia’s GDP to expand by 5.6% YoY in FY22F and 6.0% YoY in FY23F supported by favorable global commodity prices. MNCS Comment: We agreed that higher commodity prices can benefit Indonesia’s economy which we believe should be translated into higher consumer purchasing power. However, the high price of commodities also brings another consequence of higher inflation, and the inflation outlook for Indonesia remains benign.
• Furthermore, the second dose of vaccination rate nationally has reached 60.2% or equivalent to 125.43 million people.
Company News
1. BBNI IJ booked positive performance in FY21, net profit increased +232.2% YoY supported by loan disbursement growth +5.3% YoY, NII +12.4% YoY and Non-II +12.8% YoY. BBNI also issued an organic digital strategy with a focus on expanding the ecosystem and maximizing the use of API Open Banking (Analyst Meeting BBNI). MNCS Comment: We see that BBNI has succeeded in taking advantage of the momentum of economic recovery with positive results. BBNI will also maintain their improved performance this year with a loan growth target of 7%-10% YoY, NIM 4.6%-4.8% and credit cost 2%-2.3%. Moreover, with the development of a digital ecosystem through the plan to acquire Bank Mayora, it is hoped that it will maintain the acceleration of performance growth to be better. BBNI is currently trading at 1.07x PBV.
2. BBYB IJ recorded an increase of +112% QoQ daily active users (DAU) to 1.8 million in 4Q21, new customers also grew +63% QoQ to 13.3 million in 4Q21, number of transactions also increased +300% QoQ to 96 .86 million times with transaction value reaching IDR36.83 trillion (+150% QoQ) in 4Q21. BBYB also plans to add a wealth management product and a digital lending feature this year (Kontan). MNCS Comment: We view that BBYB's positive achievements in 4Q21 can support performance in FY21E. The company's steps to continuously expand and innovate are expected to be able to take it to better performance and compete with other competitors in the digital banking industry. The corporate action in the form of the Right Issue will be carried out by the company and the breakthroughs made are expected to be able to boost the company's performance in FY22E. BBYB is currently trading at 12.19x PBV.
3. BANK IJ collaborates with Google Cloud Indonesia in developing cloud, scalable infrastructure, data analytics and machine learning. This is done to encourage financial inclusion which includes innovative breakthroughs, corporate strategies, and services in sharia finance (Emiten news). MNCS Comment: We view positively the company's collaboration is in line with the company's business direction in the realm of digital banking where technology-based supporting facilities and facilities are needed to support smooth business operations and other innovations. This might encourage the company's performance achievement in FY22E. BANK is currently trading at 26.70x PBV.
IHSG Updates
JCI rose +0.50% to 6,600.82 on Wednesday (26/01) followed by net foreign sell which reached IDR59.57 billion. The sector that supported the index movement was the healthcare sector (+1.89%) followed by the technology sector (+1.68%). On the other hand, the sectors that experienced weakness were the property sector (-1.22%) and the industrial sector (-0.05%). A positive catalyst came from the World Economic Outlook (WEO) report by the IMF in the Jan-22 edition which projects Indonesia's economic growth in 2022 at 5.6% YoY and in 2023 at 6.0% YoY. Investors will remain alert to observe the development of the Covid-19 case increase. On the other hand, the Rupiah strengthened at IDR14,353/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: BBHI, MAPI, ISAT, BWPT.
Corporate Action
RUPS: GEMS, MDKA, PURA
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