Global Market Highlights
DJIA rose by +0.98% on Thursday (07/10) followed by S&P 500 (+0.83%) and Nasdaq (+1.05%). Wall Street's rebound was driven by the agreement over the US debt ceiling extension until December-21, the easing concerns of Europe’s energy crunch, and the sharp decline of jobless claims in the US. The US government released data on its Initial Jobless Claims until the beginning of October-21 which fell to 326,000 from the previous data in the level of 364,000, followed by the Continuing Jobless Claims which also fell to 2.71 million from previously 2.81 million. Today the market will be looking forward to several data releases such as: 1) US Unemployment Rate; 2) US Non Farm Payrolls; 3) Canada Unemployment Rate.
Domestic Update
• The Indonesian parliament decided to pass the Tax Harmonization Bill including rising VAT from 10% to 11%, carbon levy and keeping the corporate tax rate unchanged at 22% compared with an earlier plan to cut it to 20% in 2022. This law is aimed to optimize revenue collection and tax compliance, implying an additional revenue of IDR130 trillion and higher tax ratio to 9.2% GDP. MNCS Comment: We do understand that fiscal consolidation is much needed in order to maintain fiscal health. However, implementing fiscal tightening too soon would be counterproductive with the plan to boost economic growth. Increasing VAT from 10% to 11% would only hurt consumption in our opinion, given that the 2022 macro theme remains a recovery momentum which we strongly believe government support is still needed.
• Furthermore, there was an addition of 149 new Covid-19 cases in Jakarta yesterday.
Company News
1. MPPA IJ PT Aplikasi Karya Anak Bangsa (GOTO) added their MPPA’s stock ownership through the transaction on October 4. The total number of shares acquired was 507,142,900 shares at a price of IDR700/share or equivalent to 6.74% of MPPA’s total shares with a total transaction value of IDR355 billion (CNBC Indonesia). MNCS Comment: We assess that the company's shares divestment was carried out by MPPA aimed to expand investors and capital to develop the company’s investment in the future. MPPA is currently trading at level 55.56x PBV.
2. BNBA IJ recorded IDR145.90 billion net interest income in 1H21 or slipped by -4.06% YoY (vs IDR152.07 billion in 1H20). Other operating expenses were successfully reduced from IDR126.19 billion in 1H20 to IDR101.82 in 1H21. BNBA posted a net profit of IDR42.14 billion in 1H21 or rose by +469.46% YoY (vs IDR7.40 billion in Rp1H20) (Kontan). MNCS Comment: The increase in BNBA's net profit was supported by a decrease in loss reserves to IDR1.74 billion in 1H21 (vs IDR21.15 billion in 1H20). In addition, the increase in other operating income, and the decrease in the number of other operating expenses made an improvement of BNBA's financial performance. Currently, BNBA is trading at level 49.57x/2.03x PER/PBV.
3. JSMR IJ recorded an increase in the average daily traffic volume (LHR) of Jasa Marga Group toll roads by +17.4% MoM from 2.59 million LHR in 8M21 to 3.03 million LHR in 9M21 (kontan). MNCS Comment: We see an increasing trend in the use of LHR driven by the easing of the level of Community Activity Restriction (PPKM) in a number of regions and a decrease in Covid cases in Indonesia. Thus, community and business activities began to run well. JSMR is trading at the level of 16.96x/1.46x PER/PBV.
IHSG Updates
JCI was flat by -0.01% to 6,416.40 on Thursday (07/10) while net foreign buy reaching IDR1.57 trillion. JCI closing was flat led by the energy sector (-2.83%), followed by the industrial sector (-2.56%). On the other hand, there was a strengthening led by the non-cyclical consumer sector (+2.58%), followed by the cyclical sector (+1.88%). The JCI movement was driven by profit-taking by a number of investors and a decline in coal and other energy stocks due to a deep decline in coal commodity prices. However, the market eyes on the debt crisis in property development companies in China. On the other hand, the Rupiah strengthened at IDR14,217 level on the spot market. We estimate the JCI will move in the range of 6,350-6,430. Today's recommendations: MEDC, IRRA, ACES, BBRI.
Corporate Action
Right Issue: BEKS (IDR77/share)
RUPS: BBYB
Public Expose: INDF
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