Global Market Highlights
DJIA is down -0.02% on Thursday (27/01) followed by S&P 500 (-0.54%) and Nasdaq (-1.40%). Wall Street was slightly volatile throughout the trading day, US GDP growth in 4Q21 of +6.9% QoQ (vs +5.5% on consensus) pushed stocks up in early trading. However, the index was again depressed and closed in the red zone, triggered by the returning concerns of the investors for the Fed of being aggressive in tightening monetary policy after the results of the FOMC meeting were announced yesterday. Market participants speculated that the interest rate hike (FFR) could occur as much as or even more considering the high inflation rate, as well as the solid US labor market which supports monetary tightening as reflected by the release of initial unemployment data as of 22nd January, which fell 30,000 to 260,000 (vs 290,000 in the previous week). Today, the market will be looking toward several data releases such as: 1) US Michigan Consumer Sentiment Final; 2) US Core PCE Price Index YoY; 3) Germany GDP Growth Rate YoY Flash.
Domestic Update
• Indonesia's CB Governor Perry Warjiyo said BI will keep policy rate low at 3.5% until the sign of rising inflationary pressure appears. He expects inflationary pressure to strengthen in 3Q22. MNCS Comment: We agreed that throughout 2022, inflation will start rising gradually. Some of the major contributing factors include higher commodity prices and inflation stimulating fiscal policy through rising VAT and tobacco excise duty. We projected inflation to remain within CB's target, hence monetary policy could still be directed to support economic recovery.
• Furthermore, the second dose of vaccination rate nationally has reached 60.6% or equivalent to 126.17 million people.
Company News
1. BMRI IJ obtained +66.8% YoY net profit growth to IDR28.03 trillion in FY21. This growth is supported by the digitalization of banking services through Super App Livin' by Mandiri and Kopra by Mandiri (Bisnis Indonesia). MNCS Comment: We see that the transformation has been successful after the Livin's Mandiri application which was launched in 10M21 reached 10 million customers with a transaction value of IDR1.63 trillion. Through this digital innovation, it is hoped that BMRI might maintain its positive performance in the future. BMRI is trading at the level of 1.80x PBV.
2. BBCA IJ posted an increase by +15.8% YoY net profit growth to IDR31.4 trillion in FY21. BBCA's total loans increased by +8.2% YoY to IDR637 trillion in Des-21, exceeding the growth target of 6% (Bisnis Indonesia). MNCS Comment: We view that BBCA's positive achievement was in line with the economic recovery and the company's continuous expansion of the digital ecosystem in FY21 mobile banking transactions grew +60% YoY. BBCA is trading at the level of 4.86x PBV.
3. EXCL IJ signed a Conditional Share Purchase Agreement to acquire 66.03% shares of PT Link Net Tbk on 27 Jan-22. The purchase price was IDR4,800 per share with a transaction value of IDR8.72 trillion (Kontan). MNCS Comment: We see that through this acquisition, EXCL might increase its efficiency and reach a wider network. The company also has the potential to increase its revenue along with the increasing demand for digital services. Currently, EXCL is trading at 25.01/1.71x PER/PBV.
IHSG Updates
JCI rose +0.16% to 6,611.16 on Thursday (27/01) followed by net foreign sell reaching IDR71.64 billion. The sector leading the index movement was the transportation sector (+2.07%) followed by the energy sector (+1.36%). On the other hand, the infrastructure sector weakened by -1.50% followed by the technology sector (-1.18%). The JCI's appreciation was driven by the strengthening of big caps bank issuers following the release of positive-performing financial reports amid the sentiments for the strengthening of the Fed's interest rate (FFR) which will be begun on Mar-22. The increase in a number of commodity prices also supported the movement of indices such as coal (+0.22%) and WTI oil (+2.04%). On the other hand, the Rupiah weakened at IDR14,386/USD level. We estimate that the JCI will move in the range of 6,575-6,650. Today's recommendations: INCO, BBYB, WEGE, CPRO.
Corporate Action
IPO: BAUT (IDR100/share)
RUPS: MASB, DGNS
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