Global Market Highlights
DJIA weakened by -0.46% on Thursday (14/07), followed by S&P 500 (-0.30%) and Nasdaq (+0.03%). Wall Street closed mixed with the Fed's comments that gave certainty to the Jul-22 FFR hike of 75 bps became a positive catalyst for Wall Street. Meanwhile, investors were watching the data on initial jobless claims as of 9-Jul which increased to 244,000 (vs 235,000 previously) and the PPI Jun-22 which rose +1.1% MoM to depress the index. Today, the market will be looking toward several data releases such as: 1) US Retail Sales MoM; 2) US Michigan Consumer Sentiment Prel; 3) US Industrial Production YoY.
Domestic Update
• BPS will release trade balance data for the month of Jun-22 today and is expected to remain in surplus and increase from May-22 which amounted to USD2.8 billion. MNCS Comment: The trade balance which remains in surplus and increases will be driven by commodity exports, especially CPO after the resumption of exports.
• Furthermore, the national Covid-19 daily rate had increased by 3,584 active cases (14/07).
Company News
1. AMRT IJ reported the addition of 645 new outlets in 1H22, bringing the total operating outlets to 17,173 outlets, 27% outlets in Jabodetabek, 41% outlets in Java (ex-Jabodetabek), 32% ex-Java (Emiten News). MNCS Comment: With the target of adding new outlets in FY22E to reach 800-1,000 outlets, the company's realization reached 81-65%. We see that the addition of outlets would boost the company's performance, especially through fee-based income that would increase the company's margins. NPM in 1Q22 was recorded at 2.95% (vs 2.60% in 1Q21). AMRT is currently traded at 29.88x/8.55x PER/PBV.
2. LPPF IJ would open 5 new outlets on Sep-Nov’22 located in South Sulawesi, East Java, Semarang, Southeast Sulawesi and East Kalimantan. Up to FY22E, the company's target number of outlets will reach 148 outlets (Investor ID). MNCS Comment: We view positively that the company's expansion outside Java was that could increase people's purchasing power in the area. Recorded in 1Q22, the company's SSSG was 18.6%. LPPF is currently traded at 20.87x/24.31x PER/PBV.
3. AKRA IJ reported the development of solid business lines in 1H22, particularly in the fuel trading and distribution business segment. Apart from fuel products, the company's performance would be supported through the chemical business, where chemical prices rose +60-70% YoY throughout 1H22. (Kontan). MNCS Comment: We see the company can take advantage of the momentum of rising fuel prices well. Even though only seasonal, the company's future performance would be supported by the JIIPE business line where the company targets the sale of 40 hectares of land in FY22E. Currently AKRA is trading at 12.19x/2.14x PER/PBV levels.
IHSG Updates
JCI strengthened by +0.74% to 6,690.09 on Thursday (14/07), followed by net foreign sell which reached IDR464.17 billion. The majority of sectors experienced strengthening and boosted the index rate, led by the industrial sector (+2.29%) followed by the energy sector (+0.85%). On the other hand, the weaker sectors were led by the financial sector (-0.83%) followed by the property sector (-0.61%). The index's strengthening was in line with other Asian markets amid the release of US inflation data on Jun-22 which reached +9.1% YoY. The catalyst that pushed the index rate was the performance of the PMI version of Bank Indonesia in 2Q22 which increased and remained expansive at 53.61% (vs 51.77% in 1Q22). On the other hand, the Rupiah exchange rate closed lower at IDR14,993/USD. We estimate that the JCI will move in the price range of 6,600-6,730 pending the release of Balance of Trade Jun, Imports YoY JUN and Exports YoY JUN data. Today's recommendation: ASSA, BBCA, GOTO, PGAS.
Corporate Action
Cum Dividend: SMRA (IDR6/share), MICE (IDR15/share)
RUPS: WOOD
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