Global Market Highlights
DJIA weakened by -0.62% on Tuesday (12/07), followed by S&P 500 (-0.92%) and Nasdaq (-0.95%). Wall Street was corrected amid the decline in US T-note 10Y yield to 2.95%. Investors were again taking a wait and see attitude for the next period with the Jun-22 inflation rate expected to rise +8.8% YoY to be the highest in the last 40 years. Negative sentiment also came from investors regarding supply chain disruptions if China re-implemented a lockdown policy amid mass testing of Covid-19. Today, the market will be looking toward several data releases such as: 1) US Core Inflation Rate YoY; 2) UK GDP YoY; 3) Germany Inflation Rate YoY Final.
Domestic Update
• The government issued 6 series of SBSN amounting to IDR 6,025 trillion with incoming bids reaching IDR12,751 trillion on Tuesday (12/07). MNCS Comment: The awarded value in the SBSN auction yesterday was lower than the government's indicative target of IDR7 trillion. The value of incoming bids was also lower than the previous auction which reached IDR15.78 trillion, indicating that investors tend to wait and see for the release of US inflation data for Jun-22.
• Furthermore, the national Covid-19 daily rate had increased by 3,361 active cases (12/07).
Company News
1. MDKA IJ reported that the exploration costs in 2Q22 reached IDR300.78 billion. Exploration activities were carried out in the Tujuh Bukit, Wetar and Pani Island areas (IQ Plus). MNCS Comment: The company's exploration cost allocation increased by +232.35% YoY compared to the allocation in 2Q22 of IDR90.5 billion. It is hoped that this increase in exploration will increase the company's resources and reserves, amidst the decline in the gold production target in FY22 (100,000 - 120,000 ounces). Currently, MDKA is traded at the level of 21.46x/7.49x PER/PBV.
2. SSIA IJ won a new contract value of IDR1.6 trillion in 1H22. The company also targeted a revenue of IDR3.45 trillion or grew +47% YoY in FY22E (Kontan). MNCS Comment: Contract realization up to 1H21 had reached 84.21% of the company's target in FY22E of IDR1.9 trillion. Meanwhile in 1Q22, the company's revenue grew +71.43% YoY to IDR776.44 billion (vs IDR447.08 billion in 1Q21). Currently, SSIA is traded at 0.50x PBV.
3. ACST IJ recorded a new contract value in 1H22 of IDR529.65 billion, of which 14.71% came from foundations, 1.26% from structures and 84.03% came from infrastructure (Kontan). MNCS Comment: In 2Q22, the company's new contract value added IDR338.65 billion or grew +77.30% QoQ. Meanwhile, the value of new contracts in 1H22 grew +177.30% YoY from the 1H21 achievement of IDR191 billion. ACST is currently traded at 1.90x PBV.
IHSG Updates
JCI weakened by -0.06% to 6,718.23 on Tuesday (12/07), followed by net foreign sell which reached IDR142.46 billion. The majority of sectors were weak and weighed on the index's pace, led by the health sector (-0.58%) followed by the cyclical sector (-0.33%). On the other hand, the sector that experienced strengthening was led by the transportation sector (+1.74%) followed by the energy sector (+1.53%). The index corrected along with other Asian bourses. Investors were worried that the re-imposition of potential lockdown in China would hamper global economic growth. On the other hand, the Rupiah exchange rate closed lower at IDR14,988/USD. We estimate that the JCI will move in the price range of 6,678-6,800. Today's recommendation: BIRD, GZCO, HRUM, INCO.
Corporate Action
Cum Dividend: PWON (IDR4/share)
RUPS: KPIG, MCAS
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