Global Market Highlight
DJIA fell by -0.24% on Tuesday (27/07) followed by S&P 500 (-0.47%), and Nasdaq (-1.21%). Wall street closing was lower as investors awaited the FOMC Meeting. Subsequently, the IMF stated that there is an inflation risk which could trigger the Federal Reserve to take pre-emptive action. On the other hand the increase in new variants of Covid-19 cases in several countries added to negative sentiment for the market. The market will look forward to several data releases today, such as: 1) US MBA Mortgage Applications; 2) Germany GfK Consumer Confidence; 3) UK Nationwide Housing Prices YoY.
Domestic Update
• Government has conducted Islamic debt securities auction for series SPNS14012022 (reopening), PBS031 (new issuance), PBS032 (new issuance), PBS030 (reopening), PBS029 (reopening) and PBS028 (reopening) yesterday. From the auction the government has raised IDR13.15 trillion for budget financing. MNCS Comment: We see that investors' appetite remained the major driver of government debt securities issuance success. This was attributable to investors ample liquidity as well lack of external pressures. Total incoming bids were IDR56.693 trillion and the total amount awarded was IDR1.15 trillion higher than the indicative target. The result of the auction is in line with our expectations.
• Furthermore, there was an addition of 3,567 new Covid-19 cases in Jakarta yesterday.
Company News
1. CPIN IJ will distribute FY20 cash dividends of around IDR112/share or reaching IDR1.84 trillion of the total FY20 net profit of IDR3.84 trillion (Emitennews). MNCS Comment: CPIN's payout ratio is 47.80% of FY20 net profit, while the dividend yield offered is 1.79% or an increase compared to FY19 yield of 1.32%. Currently CPIN is trading at 17.61x/4.13x PE/PBV levels.
2. AKRA IJ will distribute an interim FY20 dividend of around IDR60/share or IDR237 billion from a total FY20 net profit of IDR550 billion. Cum date on August 3, 2021 (CNBC Indonesia). MNCS Comment: AKRA's payout ratio is 43% of FY20 net profit, while the interim dividend yield offered is 1.69% or lower than FY19's interim yield of 1.81%. Currently AKRA is trading at 12.98x/1.58x PE/PBV levels.
3. SIDO IJ recorded sales of IDR1.65 trillion in 1H21 increased +13.36% YoY (vs IDR1.46 trillion in 1H20). COGS increased from IDR678.39 billion in 1H20 to IDR724.72 billion in 1H21. SIDO recorded a IDR502 billion net profit in 1H21 or rose by +2132% YoY (vs IDR413.79 billion in 1H20) (Kontan). MNCS Comment: Strong domestic demand was driven by an increase in the herbal and supplement segment +15% YoY with high sales of Tolak Angin in 2Q21. The F&B segment also increased +12% YoY. Management raised the net profit target to 15% YoY with revenue increasing 10% YoY throughout FY21E. Currently SIDO is trading at 22.86x/7.26x PE/PBV levels.
IHSG Updates
JCI fell by -0.15% to 6,097.05 on Tuesday (27/07) while net foreign buy reaching IDR46.39 billion. JCI closing was lower along with most sectors led by non-cyclical (-1.42%) followed by property (-0.59%). On the other hand, the transport sector strengthened by +1.31%, followed by tech (+1.19%). JCI weakened due to the high number of mortality rates due to the Covid-19. Investors will pay attention about what will happen after the easing of PPKM. There is a risk that the number of Covid-19 infection cases and death cases will rise again. Meanwhile the Rupiah exchange rate was weakening at Rp14,493. We estimate the JCI will move in the range of 6,050-6,150 while waiting for inflation rate. Today's recommendation: TLKM, PWON, HRUM, MAPI.
Corporate Action
RUPS : MSIN, BWPT, CARS
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