Global Market Highlights
DJIA weakened -0.56% on Tuesday (08/03), followed by S&P 500 (-0.72%) and Nasdaq (-0.28%). Wall Street was depressed as market participants' expectations for higher inflation rates after the significant increase in commodity prices, the US government's action to ban imports of Russian commodities such as oil, liquefied natural gas and coal accelerated price increases even further and potentially threatened the growth economy. Investors also responded negatively to the release of trade balance data, which returned a deficit of USD 89.7 billion, higher than the consensus of a deficit of USD 87.1 billion. Today, the market will be looking toward several data releases such as: 1) US MBA Mortgage Applications; 2) US EIA Crude Oil Stocks Change; 3) Japan GDP Growth Annualized Final.
Domestic Update
• The Financial Services Authority (OJK) is preparing regulation so that banks can acquire companies that use information technology to produce financial products as their main business (fintech). MNCS Comment: We view this regulation as a breath of fresh air for banks because it provides flexibility which is expected to encourage the creation of more business synergies and the development of a more integrated financial ecosystem considering the increasing role of fintech among Indonesians and consumers.
• Furthermore, the second dose of vaccination rate nationally has reached 71.3% or equivalent to 148.59 million people.
Company News
1. ASII IJ prepares IDR19 trillion of capex in FY22E, up +111.11% YoY (vs IDR9 trillion in FY21). Most of the capex will be allocated for the replacement of heavy equipment mining services PT Pamapersada Nusantara (Kontan). MNCS Comment: We see that the company's optimism to increase its capex this year was in line with the company's good performance in FY21, plus the potential for increased demand for the mining sector due to disruption of global supply in the midst of the Russo-Ukrainian war. ASII is trading at the level of 12.53x/1.47x PER/PBV.
2. BJBR IJ recorded a net interest income of IDR13.21 trillion in FY21 or up +4.67% YoY (vs IDR12.62 trillion in FY20). Net profit increased by +20.12% YoY to IDR2.03 trillion in FY21 (vs IDR1.69 trillion in FY20) (Bisnis Indonesia). MNCS Comment: We see that the company is optimistic to improve its performance this year after recording a good performance in FY21 along with the economic recovery. The Company recorded credit growth above the industry average of +7.1% YoY to IDR95.8 trillion. BJBR is trading at the level of 7.25x/1.11x PER/PBV.
3. DOID IJ allocated IDR473.5 billion of fund to buyback 1.72 billion shares with a nominal value of IDR50 per share. The buyback period starts from 7 Mar-22 to 6 Jun-2022 (IQ Plus). MNCS Comment: The Company plans to keep the buyback shares as treasury shares for a maximum period of 3 years. This act will not have a negative impact on the company's business activities. DOID is trading at the level of 1.12x PER/PBV.
IHSG Updates
JCI weakened -0.80% to 6,814.18 on Tuesday (08/03), followed by net foreign buy which reached Rp613.69 billion. A number of sectors pushed the JCI into the red zone, led by the technology sector (-3.75%) followed by the energy sector (-3.41%). On the other hand, the strengthening sector was led by the property sector (+2.64%) followed by the infrastructure sector (+0.53%). The action of taking profit in energy stocks caused the index to fall along with the plan to increase the royalty rate for coal to around 20%. The recent increase in commodity prices that has been driving the exchange rate received negative news where the London Metal Exchange (LME) imposed a trading halt on nickel trading that had increased +250%. Investors tend to ignore the release of data on foreign exchange reserves which increased to USD141.4 billion. Meanwhile, from the situation of Covid-19, it was recorded that the addition of positive cases again jumped by 30,148 on (08/03). On the other hand, the Rupiah weakened at IDR14,388/USD level. We estimate that the JCI will move in the range of 6,758-6,940 while waiting for Consumer Confidence FEB data. Today’s recommendation: AKRA, MAPA, BBKP, ADHI.
Corporate Action
Cum Rights Issue: ESIP (IDR89/share)
Cum Dividend: MEGA (IDR402.28/share)
RUPS: NOBU
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