MNCS Morning Navigator

22 Juni 2022

MNCS Morning Navigator June 22, 2022

Global Market Highlights
DJIA strengthened by +2.15% on Tuesday (21/06), followed by S&P500 (+2.45%) and Nasdaq (+2.51%). Wall Street strengthened amid the release of home sales data (existing home sales) May-22 which fell -3.4% MoM, as well as the Chicago Fed National Activity Index May-22 which reflected slower economic activity growth of +0.01 point (vs +0.4 point in Apr-22). Today, the market will be looking toward several data releases such as: 1) US Fed Chair Powell Testimony; 2) UK Inflation Rate YoY; 3) UK Core Inflation Rate YoY.

Domestic Update
The incoming bid value in the SUN auction on Tuesday (21/06/22) reached IDR35.06 trillion and the nominal won was IDR18.88 trillion. MNCS Comment: The incoming bid value was lower than the previous auction of IDR43.54 trillion in line with our expectation as investors tend to wait and see amid rising UST yield.
Furthermore, the national Covid-19 daily rate had increased by 1,678 active cases (21/06).

Company News
1. LPPF IJ will extend the buyback period for 18 months from 6-Jun 22 to 5-Dec 23. The allocation of buyback funds reached IDR1 trillion with a maximum purchase of 262.6 million shares (Kontan). MNCS Comment: We are optimistic about the company's share repurchase plan, considering the company's potential future income, in line with the increasing mobility of the people along with the gradually recovering purchasing power. LPPF is currently trading at 20.82x/24.26x PER/PBV.
2. INCO IJ will not distribute any dividend for the FY21 financial year with the company focusing on developing 3 ongoing projects and meeting the company's working capital going forward (Emiten news). MNCS Comment: We view positively the company's efforts to secure working capital for the ongoing mega projects in Bahodopi, Pomalaa and Sorowako. As for the annual report, it is noted that the Pomalaa processing plant can produce 120,000 tons of nickel per year. INCO is currently trading at 17.98x/2.19x PER/PBV.
3. ADRO IJ plans to extend the buyback period for 3 months from 20-Jun 2022 to 19-Sep 2022 (CNBC Indonesia). MNCS Comment: We are certain of the company's steps where it can secure the income received and improve the company's financial metrics going forward. ADRO is currently trading at 4.22x/1.48x PER/PBV.

IHSG Updates
JCI strengthened by +0.97% to 7,044.07 on Tuesday (21/06), followed by net foreign sell which reached IDR434.81 billion. All sectors strengthened and pushed up the index, led by the energy sector (+1.97%) followed by the infrastructure sector (+1.75%). The index continued to strengthen in line with the majority of Asian bourses. Meanwhile, investors were waiting for the BI7DRR benchmark interest rate decision on Thursday, 23-June which is expected to remain the same. On the other hand, the Rupiah exchange rate closed lower at IDR14,812/USD. We estimate that the JCI will move in the price range of 6,850-7,100 pending the release of M2 Money Supply YoY MAY data. Today's recommendation: DOID, INCO, TINS, WMUU.

Corporate Action
Cum Dividend: DUTI (IDR380/share), SPTO (IDR25/share), IGAR (IDR5/share)

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