Global Market Highlights
DJIA weakened -0.69% on Friday (11/03), followed by S&P 500 (-1.30%) and Nasdaq (-2.18%). Wall Street weakened as market participants were disappointed with the ongoing resolution of the Russo-Ukrainian conflict, after the Ukrainian Foreign Minister 'Kuleba' announced that there was no progress in the discussions carried out by the two sides. In addition, a series of negative catalysts also weighed on the market including: 1) Goldman Sachs cut its forecast for US GDP to 1.75% from 2.0% due to soaring oil prices and exposure to the Russia-Ukraine conflict; 2) Yield US T-note 10y rise to 2.018% which weighed on tech stocks; 3) The release of the Michigan Consumer Sentiment Prel of Mar-22 which fell to the level of 59.7 points. Today, the market will be looking toward several data releases such as: 1) US Consumer Inflation Expectations; 2) UK NIESR Monthly GDP Tracker; 3) Germany 6-month Bubill Auction.
Domestic Update
Foreign investors recorded a net sell of IDR21.46 trillion in the domestic financial market during 7-9 Mar 2022, consisting of foreign net sells in the Government Bond market of IDR10.87 trillion and in the equity market of IDR10.60 trillion. MNCS Comment: Despite recording a net sell last week, the domestic financial market still recorded inflows of IDR7.5 trillion year to date. Non-residents sold Government Bonds and bought equities which showed a risk appetite amidst a favorable banking sector outlook and rising commodity prices, especially energy.
• Furthermore, the second dose of vaccination rate nationally has reached 72.5% or equivalent to 150.99 million people.
Company News
1. BBRI IJ has restructured loans of IDR242.22 trillion as of Dec-21 with the remaining of IDR156.95 trillion is still in the restructuring process. While IDR62.16 trillion of loan has been paid, IDR20.26 trillion has been disbursed and the rest of IDR5.8 trillion was credit default (IQPlus). MNCS Comments: We see that the restructuring has been successful, where credit defaults are only 5% of the total restructured loans, while the company has anticipated defaults of up to 20%. This encouraged the company to record a good performance in FY21, followed by NPL which was maintained at the level of 3.08%. BBRI is trading at the level of 21.47x/4.31x PER/PBV.
2. ARNA IJ plans to distribute dividends of IDR327.20 billion or IDR45/share. This value is higher than last year's IDR217.67 billion. Cum dividen pada tanggal 16 maret 2022 (Investor Daily). MNCS Comments: The company provided an equal dividend yield compared to the previous year, where in FY21 the yield was 5.08% (vs 5.14% in FY20). ARNA is trading at the level of 13.80x/4.20x PER/PBV.
3. CENT IJ and its subsidiary PT Centratama Menara Indonesia (CMI) plans to acquire its affiliated company, PT Epid Menara AssetCo for IDR5.05 trillion. CENT will acquire 999 shares of EPID Menara AssetCo from EMH and CMI will acquire 1 share of EPID Menara AssetCo from EP ID Holdings (Bisnis Indonesia). MNCS Comment: We see that the company's plan to expand inorganically through this acquisition might potentially increase the company's revenue and strengthen the company's competitive position by increasing the number of telco tower ownership. CENT is trading at the level of 2.87xPBV.
IHSG Updates
JCI closed flat -0.02% to 6,922.60 on Friday (11/03), followed by net foreign sell which reached Rp73.77 billion. The weakening sector was led by the energy sector (-0.84%) followed by the financial sector (-0.49%). On the other hand, the sector that experienced strengthening was led by the transportation sector (+3.57%) followed by the infrastructure sector (+1.50%). Investors highlighted the negative catalyst that came from the release of US inflation rate data for the month of February-22 reaching 7.9% YoY, the highest for almost 40 years. This signaled US monetary tightening through aggressive rate hikes (more than 25 bps). Meanwhile, the Russia-Ukraine conflict that has not yet subsided has made market players worried about the outlook for the global economy in the future. On the other hand, the Rupiah weakened at IDR14,388/USD level. We estimate that the JCI will move in the range of 6,814-6,940. Today’s recommendation: ISSP, IMJS, BBRI, MDKA.
Corporate Action
RUPS: CENT, LPLI
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