MNCS Morning Navigator

12 Oktober 2021

MNCS Morning Navigator October 12, 2021

Global Market Highlights

DJIA weakened by -0.72% on Monday (11/10) followed by S&P 500 (-0.69%) and Nasdaq (-0.64%). Wall Street closed at the red zone as supply chain problems, higher costs of energy, and inflation pressures have raised the market’s concern in the upcoming third-quarter earnings reporting season. Meanwhile, the Conference Board Employment Trends Index in the US decreased slightly for the first time in seven months to 110.35 in September-21 from previously at the level of 110.68 in August-21, signaling that the recovery of the labor market after the pandemic could be bumpy in the months ahead. Today the market will be looking forward to several data releases such as: 1) UK Employment Change; 2) Eurozone ZEW Economic Sentiment Index; 3) Germany ZEW Economic Sentiment Index.

Domestic Update
• Bank Indonesia (BI) reported Indonesia retail sales in August-21 improved with +2.1% MoM/-2.1% YoY compared to the previous month with -5.0% MoM/-2.9% YoY. MNCS Comment: We expect Indonesia retail sales in September-21 will likely to continue to improve on the back of gradual easing in public activity and bouncing back consumer sentiment.
• Furthermore, there was an addition of 41 new Covid-19 cases in Jakarta yesterday.

Company News
1. MDKA IJ continues to explore three different areas in Indonesia, namely Tujuh Bukit in East Java (copper and gold resources), Wetar Island in Maluku (copper resources), and Pani in Gorontalo (gold resources). The total costs incurred for this exploration on 3Q21 reached IDR111.4 billion (Emitennews). MNCS Comment: We hope the company will look for more reserves in the future to increase its production and sales of the metal. MDKA is currently trading at level 417.97x/6.73x PER/PBV.
2. JPFA IJ through its subsidiary, PT Ciomas Adisatwa has expanded its new market share to export processed chicken products to Papua New Guinea. The export value of JPFA’s poultry products until 4Q21 is estimated to reach IDR1.4 billion level (Kontan). MNCS Comment: We see this effort is being made to develop the business and maintain JPFA’s food supply chain both at home and abroad in line with the government’s program to restore the national economy. JPFA is trading at the level of 6.92x/1.83x PER/PBV.
3. WSBP IJ plans to divest 3 precast concrete factories in Klaten, Cibitung, and Karawang with a total value of IDR709 billion through a tender offer on 3 November. (Kontan). MNCS Comment: We assess that the company’s divestment plan is being carried out by WSBP in a strategy to pay off the company’s debt which matures this year reaching IDR3.61 trillion and improving financial and operational performance that has been depressed since the pandemic. Currently, WSBP is trading at level 4.25x PBV.

IHSG Updates
JCI weakened by -0.34% to 6,459.70 on Monday (11/10) while net foreign buy reaching IDR903.70 billion. JCI closed lower in almost all sectors, led by the technology sector (-3.12%), followed by the cyclical consumer sector (-1.50%). On the other hand, the energy sector strengthened by +2.33%, followed by the basic industrial sector (+0.63%). The decline in the JCI was driven by profit taking by a number of investors due to the significant increase in the stock market last week. Meanwhile, the release of retail sales data showed an improvement which grew by +2.1% MoM in August 2021. On the other hand, the Rupiah strengthened at IDR14,208 level on the spot market. We estimate the JCI will move in the range of 6,400-6,500. Today's recommendations: BANK, CENT, BRMS, SMBR.

Corporate Action
Cum Stock Split Date: BBCA (1:5)

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