Global Market Highlight
DJIA rose by +0.36% on Monday (12/07) followed by S&P 500 (+0.35%), and Nasdaq (+0.21%). This week's focus is on the release of economic reports, including data on US inflation and retail sales. In addition, Federal Reserve Chair Jerome Powell will appear before Congress on Wednesday (14/7) and Thursday (15/7) to explain his views about inflation. The market will look forward to several data releases today, such as: 1) US Inflation Rate YoY; 2) Germany Inflation Rate YoY; 3) China Balance of Trade.
Domestic Update
• As of 1H21 Economic Recovery Program (PEN) budget has been 36.1% realized from the target or equivalent to IDR252.3 trillion according to MoF. MNCS comment: Slow budget realization so far has been constraint for economic recovery. We hope government could intensify its social aid transfer, let alone further expansion of Emergency Public Activity Restriction (PPKM Daurat) outside Java & Bali as well as potential extension of duration for stricter restriction up to 6-week scenario.
• Furthermore, there was an addition of 14,619 new Covid-19 cases in Jakarta yesterday.
Company News
1. ANTM IJ spent around IDR25.86 billion in 2Q21 for exploration. The exploration focused on gold in the Pongkor area, West Java. Meanwhile, nickel and bauxite exploration are in Pomalaa, Tapunopaka, and Buli in North Maluku (Emitennews). MNCS Comment: We see that the expenditure is already included in ANTM's IDR2.84 trillion capex budget. ANTM plans to use it for regular exploration and downstreaming projects. Currently ANTM is trading at 24.30x/3.09x PE/PBV levels.
2. MDKA IJ spent around IDR90.5 billion in 2Q21 for exploration. The exploration focuses on copper and gold commodities in Tujuh Bukit Banyuwangi, East Java, Wetar Island, Southwest Maluku, and Pani Gorontalo. The results are drilling from underground followed by 5 underground rigs conducting resource definition drilling with a total drilling of 7,447.8 meters (IQ Plus). MNCS Comment: MDKA did private placement of IDR2.44 trillion earlier this year, in which the fund will be used for capex. MDKA also set aside USD290 million for acid iron metal plant project this year. Currently MDKA is trading at 6.68x PE/PBV levels.
3. ELSA IJ recorded consolidated work contracts worth IDR6.5 trillion in 1H21 or equivalent to 75% of the Company's Work Plan and Budget (RKAP) 2021. In the upstream sector, this segment is still the largest contribution to the total solution services owned such as well maintenance services and operation maintenance, although in this segment there is a slight correction in exploration services due to the delay of several upstream oil and gas projects (Bisnis Indonesia). MNCS Comment: ELSA will continue to benefit from the production plan that will continue to be improved by Pertamina in FY21. Currently ELSA is trading at 311.11x/0.53x PE/PBV. levels.
IHSG Updates
JCI rose by +0.64% to 6,078.57 on Monday (12/07) followed by net foreign buy reaching IDR872.43 billion. The market movers in last Monday's trade were the health sector strengthening by +3.29%, followed by non-cyclical (+1.51%). On the other hand, the techno sector fell by -2.25%, followed by the transportation sector (-1.69%). Most of Asian indices closing at the green zone along with JCI. On the other hand, Indonesia led the rise in global Covid-19 cases in first place with a record increase of 40,427 cases per day. The high transmission rate requires additional state budget funds for handling Covid-19.Meanwhile the Rupiah exchange rate was strengthening at IDR14,492. We estimate the JCI will move in the range of 6,020-6,100 while waiting for balance of trade. Today's recommendation: HRUM, KAEF, BNGA, ACES.
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