Global Market Highlights
DJIA rose +1.82% on Tuesday (15/03), followed by the S&P 500 (+2.14%) and the Nasdaq (+2.92%). Wall Street strengthened on the back of falling oil prices which also dampened investor concerns about higher inflation rates in the future. Positive catalyst also came from the release of Producer Price Inflation (PPI) data for the month of Feb-22 which grew by +0.8% MoM. Today, the market will be looking toward several data releases such as: 1) US Retail Sales MoM; 2) US Business Inventories MoM; 3) Japan Balance of Trade.
Domestic Update
• Government has issued IDR17.25 trillion of securities yesterday. The issuance was lower than the indicative target set at IDR20-30 trillion. Total incoming bids were IDR49.16 trillion, also lower than in the previous auction at IDR61.52 trillion. MNCS Comment: We think that lower incoming bids for government bonds may also reflect that investors remained on wait and see mode ahead of Fed's Mar-22 policy meeting as the US central bank is expected to start a monetary tightening cycle this month.
• Furthermore, the second dose of vaccination rate nationally has reached 72.8% or equivalent to 151.69 million people.
Company News
1. BBNI IJ plans to distribute dividends of IDR2.72 trillion, or equal to 25% of net profit in FY21 with value of IDR146/share. Total dividends increased by 3.3 times compared to last year's IDR820 billion (CNBC Indonesia). MNCS Comment: The company provided a higher dividend yield than the previous year, where in FY21 the yield was 1.81% (vs 0.72% in FY20). BBNI is trading at the level of 13.82x/1.22x PER/PBV.
2. SIDO IJ has prepared a capex of IDR210 billion in FY22E which will be allocated for maintenance and construction of ongoing projects, one of them is greenhouse bioethanol. Meanwhile, the company targets sales and net profit to grow +15% YoY in FY22E (MNC Group Investor Forum 2022). MNCS Comment: We see that the company can be more expansive through the larger capex this year compared to IDR135 billion in FY21. This year, the company plans to launch 3 new products and targets 150,000 total distribution outlets, whereas in FY21, the total of the company's outlets were 135,000. SIDO is trading at 24.51x/8.90x PER/PBV.
3. PRDA IJ recorded a +41.6% YoY increase in revenue to IDR2.65 trillion in FY21 (vs IDR1.87 trillion in FY20). Meanwhile, net profit was recorded at IDR621.62 billion or up +131.3% YoY in FY21 (IQ Plus). MNCS Comment: We see the company's positive performance was supported by an increase in the number of inspections and visits which reached 19.6 million and 3.6 million respectively in FY21. In addition, home service requests and orders through Prodia Mobile also rose +154.8% YoY and +913.9% YoY in FY21. PRDA is trading at the level of 10.49x/3.34x PER/PBV.
IHSG Updates
JCI weakened -0.49% to 6,918.18 on Tuesday (15/03), followed by net foreign buys which reached IDR3.13 trillion. All sectors weakened, led by the transportation sector (-3.13%) followed by the basic materials sector (-1.62%). The JCI was also corrected by a number of other Asian exchanges, triggered by: 1) market participants did wait and see ahead of the Fed's FOMC decision; 2) a deep correction in a number of global commodity prices; 3) a resurgence in Covid-19 cases in Asia and Europe. It seems that this weakening is an opportunity for foreign investors to buy, marked by high inflows. In addition, investors ignored the release of trade balance data for February-22 which recorded a surplus of USD3.83 billion. On the other hand, the Rupiah weakened at IDR14,388/USD level. We estimate that the JCI will move in the range of 6,850-7,000. Today’s recommendation: ADMR, BBNI, ELSA, AALI.
Corporate Action
Cum Dividend: ARNA (IDR45/share)
Cum Right Issue: MLPL (IDR500/share)
RUPS: ESSA
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