Global Market Highlights
DJIA weakened by -1.59% on Thursday (30/09) followed by the S&P 500 (-1.19%) and Nasdaq (-0.44%). Wall Street ended lower due to investors’ concerns about debt ceiling, tax legislation, government shutdown, and high inflation caused by supply bottlenecks. The US Government released data on GDP Growth Rate which rose by 6.7% QoQ from previously 6.3%. China released the NBS Manufacturing PMI data which went down to 49.6 from the previous level of 50.1. Today the market will be looking forward to several data releases such as: 1) US Markit Manufacturing PMI Final; 2) US Core PCE Price Index YoY; 3) Eurozone Core Inflation Rate YoY.
Domestic Update
• House of Representative approved a government proposal to increase VAT from 10% to 11% in 2022 and 12% in 2023. MNCS Comment: Rising VAT is one of the government 's approaches to increase revenue in order to bring back the budget deficit to -3% from GDP in 2023. We believe rising VAT would only have a minimum impact on inflation. However, raising VAT too early would likely hinder potential economic growth during the time of recovery.
• Furthermore, there was an addition of 149 new Covid-19 cases in Jakarta yesterday.
Company News
1. AGRO IJ increased its capital by right issue of 2.15 billion shares with a nominal value of IDR100. Recording date of shareholders registered in the Company's DPS on November 11, 2021. Meanwhile, the exercise price has not yet been determined (Emitennews). MNCS Comment: We see that this corporate action is one of AGRO's strategies to strengthen working capital in the context of developing a digital-based fund distribution platform. AGRO is currently targeting gig economy workers, which are projected to reach 74.8 million gig workers in FY25F. AGRO is currently trading at the level of 922.49x/11.15x PER/PBV.
2. SSMS IJ posted IDR2.34 trillion revenue in 1H21 or up by +32.2% YoY (vs IDR1.77 trillion in 1H20). Net profit was recorded at IDR696.33 billion in 1H21, a significant increase reaching 592.1% YoY (vs IDR100.61 billion 1H20) (Emitennews). MNC Comment: We see that the positive trend of rising CPO prices until the end of this year will have a positive impact on the company, coupled with increased rainfall will have an impact on CPO production. SSMS is currently trading at level of 6,26x/1,65 PER/PBV.
3. IRRA IJ acquired 51% ownership in syringe manufacturer PT Oneject Indonesia (Oneject), with an initial payment of IDR198.8 billion through the sale of treasury shares, and the remainder through a rights issue in FY22E. The acquisition process is expected to be completed in 1H22. This acquisition will expand the IRRA market segment to the global market (IQplus). MNCS Comment: We see that with this acquisition, IRRA's business will have good growth potential in the future both in terms of revenue and net profit in the coming year. IRRA is currently trading at level 29.09x/10.73x PER/PBV.
IHSG Updates
JCI rose by +2.02% to 6,286.94 on Thursday (30/09) while net foreign sell reaching IDR3.85 trillion. JCI closed higher in almost all sectors, led by the energy sector (+5.65%), followed by the financial sector (+2.82%). Meanwhile, the tech sector weakened by -0.22%. JCI strengthening was in line with the easing of tapering sentiment and the case of the Evergrande default. In addition, the increase in coal commodity prices and large purchases by foreign investors of large capitalization stocks led to an increase in the JCI’s movement. We estimate the JCI will move in the range of 6,250-6,300 while waiting for data inflation rate release. Today's recommendations: BBRI, MLPL, ASII, DOID.
Corporate Action
RUPS: TURI, SUPR, SMCB
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