MNCS Morning Navigator

06 Oktober 2021

MNCS Morning Navigator October 06, 2021

Global Market Highlights

DJIA rose by +0.92% on Tuesday (05/10) followed by S&P 500 (+1.05%) and Nasdaq (+1.25%). Wall Street's rebound was driven by the increase of tech, energy and banking-based stocks. While, the Government of Canada released data on its Balance of Trade on August-21 which grew to CAD1.94 billion (vs CAD0.74 billion on July-21). Meanwhile, the US Government released data on its Balance of Trade on August-21 with a deficit of USD73.3 billion (vs a deficit of USD70.3 billion on July-21) due to small gain in exports and a much larger increase in imports. Today the market will be looking forward to several data releases such as: 1) US Fed Quarles Speech; 2) US MBA Mortgage Application; 3) UK Construction PMI.

Domestic Update
• Government has successfully issued 6 series of Sovereign Sharia Securities (SBSN) and raising IDR5 trillion from yesterday's auction. MNCS Comment: Yields in the primary market remained low aligned with yields in the secondary market. Investors' appetite stayed high. Total incoming bids were at IDR46 trillion.
• Furthermore, there was an addition of 72 new Covid-19 cases in Jakarta yesterday.

Company News
1. ADRO IJ will complete Adaro Power's EBT (new renewable energy) project. Currently in the finalization stage of the contract to increase the capacity of solar panels at the Kelanis coal terminal. ADRO plans to increase it from 130 kWp to 597 kWp. This is in line with PLN's RUPLT 2021-2030, where the Government targets the use of renewable energy up to 51.6% in the next 10 years. (Emitennews). MNCS Comment: We see that ADRO's strategies are in line with the Government's plan for the use of NRE, where ADRO has provided solar power combined with hybrid solar panels. Meanwhile ADRO is also trying out NRE operations at the Adaro MetCoal (AMC) mine. ADRO is currently trading at level 11.88x/1.07x
2. PMMP IJ get a new sales contract for its product namely pre-fried breaded shrimp. The value reached USD10 million. This contract originates from the US and Japan (Kontan). MNCS Comment: We see that the acquisition of the sales contract can maintain the stability of PMMP's performance, amid efforts to optimize the company's new factory in Situbondo. This strategy inline with company's target of 19,000-20,000 tons in FY21 equivalent to USD185 million. Currently, PMMP is trading at level 5.72x/0.99x PER/PBV.
3. BEKS IJ plans to issue 23.38 billion new series C shares on behalf of or equivalent to 34.79% of the issued and fully paid capital. The exercise price for the rights issue is set at IDR 77 per share (CNBC Indonesia). MNCS Comment: BEKS is estimated to receive IDR1.8 trillion from this corporate action, 65% of the funds allocated for lending, while 35% of the funds will be used to strengthen BEKS’s financial structure. BEKS is trading at the level of 2.68x PBV.

IHSG Updates
JCI weakened by -0.86% to 6,288.05 on Tuesday (05/10) while net foreign buy reaching IDR1.58 trillion. JCI closed lower in almost all sectors, led by the infrastructure sector (-2.50%), followed by the tech sector (-2.12%). On the other hand, the energy sector strengthened by +1.04%, followed by the non-cyclical consumer sector (+0.82%). The JCI closed lower due to the profit-taking of a number of investors after a fairly high increase last Monday. On the other hand, the Rupiah strengthened at IDR14,253 level on the spot market. We estimate the JCI will move in the range of 6,250-6,320. Today's recommendations: IMAS, HOKI, FREN, PTPP.

Corporate Action
Cum date dividend: UNTR (IDR335/share), TEBE (IDR5/share)

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