Global Market Highlights
DJIA strengthened by +1.33% on Thursday (02/06), followed by S&P500 (+1.84%) and Nasdaq (+2.69%). Wall Street rebounded in line with expectations of a slowdown in the Fed's monetary tightening due to the released data of ADP employment change in May-22 of 128K (vs 202K on Apr-22) or below the consensus of 300K. Meanwhile, initial jobless claims as of 28-May decreased to 200K (vs 211K in the previous period) indicating a labor market that is likely to be solid. Today, the market will be looking toward several data releases such as: 1) US Non Farm Payrolls; 2) US Unemployment Rate; 3) US ISM Non-Manufacturing PMI.
Domestic Update
• The Ministry of Finance will relocate the budget of Ministries and Institutions (KL) for energy subsidy spending. MNCS Comment: The increase in global energy prices requires the state budget to be more flexible and responsive amidst the challenges of limited fiscal space. However, we see the urgency of the social protection program to maintain people's purchasing power as the engine of the economy amidst the upward trend in energy component inflation which has already risen +3.95% ytd.
• Furthermore, the second dose of vaccination rate nationally has reached 80.4% or equivalent to 167.51 million people.
Company News
1. BRIS IJ will distribute cash dividends of IDR757.05 billion or equivalent to IDR18.41 per share with dividend payout ratio of 25% of FY21 net profit of IDR3.03 trillion. Cum dividend date was set on June 7, 2022 (Kontan). MNCS Comment: BRIS will offer a dividend yield of 1.27% in FY21. The yield offered has the potential to attract investors, along with the increase in net profit of 38.42% YoY in FY21. While in the previous year FY20, the company did not distribute any dividends. BRIS is currently trading at 15.10x/2.30x PER/PBV.
2. MTDL IJ will distribute cash dividends of IDR128 billion or around IDR10.43 per share, thus making the dividend payout ratio of 25% of FY21 net profit of IDR508 billion (Emitennews). MNCS Comment: Hence, MTDL will offer a dividend yield of 1.50% or less than the FY20 yield of 10.60%. MTDL is currently trading at 12.96x/2.91x PER/PBV.
3. SGRO IJ will distribute cash dividends of IDR245.51 billion or equivalent to IDR135 per share with the dividend payout ratio of 30.6% of FY21 net profit of IDR802.08 billion. Cum dividend date was set on June 7, 2022 (Kontan). MNCS Comment: SGRO will offer a dividend yield of 5.87%, while in FY20, the company did not distribute dividends due to experiencing a net loss of IDR201.42 billion. Currently, SGRO is trading at 4.22x/0.89x PER/PBV levels.
IHSG Updates
JCI closed flat by -0.00% to 7,148.72 on Thursday (02/06), followed by net foreign buys which reached IDR340.88 billion. The majority of sectors experienced weakness, led by the raw materials sector (-1.60%) followed by the financial sector (-1.30%). On the other hand, the sector that experienced strengthening was led by the technology sector (+4.43%) followed by the transportation sector (+2.01%). Investors are keeping an eye on the release of domestic inflation rate data for May-22 which rose +0.40% MoM/+3.55% YoY. Meanwhile, manufacturing PMI in the same period remained expansionary but slowed to 50.8 points (vs 51.9 in Apr-22). On the other hand, the Rupiah exchange rate closed higher at Rp14,483/USD. We estimate that the JCI will move in the price range of 7,000-7,267. Today's recommendation: ADHI, ISAT, INKP, UNVR.
Corporate Action
Cum Dividend: TINS (IDR61.22/share), ANTM (IDR38.74/share), PTBA (IDR688.52/share)
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